‘New’ Port Harcourt refinery, an unfulfilled dream

Tuesday, June 22, 2021 8:34 am

Emmanuel Obe

By Emmanuel Obe

By 2022, the batch of operators and managers recruited and trained in 1987 to run the Port Harcourt refinery complex would have clocked 35 years in service and probably due for retirement without for once achieving the feat of running the plant at full or even optimum capacity.

The new Port Harcourt refinery as it was then known was celebrated at its inauguration in 1989 as the most modern petroleum refinery plant in the world with an installed capacity to process 150,000 barrels of crude oil per stream day.

Built at the cost of about $500 million dollars, the refinery had four major plants dedicated to different stages and levels of processing. They are the Crude Distillation Unit (CDU), the Crude Refraction Unit (CRU), the Fluid Catalytic Cracker (FCC) and the Alkalinisation Unit. They were called Areas 1, 2, 3 & 4. The old refinery nearer the main gate of the complex was called Area Five.

One innovation that the new Port Harcourt refinery came with was the computerisation of the plant, which made operations seamless, automated and stress-free. Operators could sit in control rooms sipping tea while monitoring the running of the plant.

Built for export, the products from the refinery were to be piped to the jetty at Okrika which was expanded to berth bigger vessels and move products to much bigger vessels in the Atlantic off the coast of Bonny. And that would have celebrated a turning point in Nigeria’s petroleum industry. In the 1990s a pipeline was constructed under the Bonny Export Terminal project to link the refinery with Bonny to further facilitate the export infrastructure of the refinery.

However a new loading Bay was also built to handle domestic distribution and from products would be pumped to the North through Aba, Enugu, Makurdi and Gombe. Products for the domestic market was to come mainly from the old refinery plant with an expanded capacity to process 60,000 barrels of crude oil per stream day.

Somehow, operations at the old refinery plant stalled soon after the new plant came on stream. Several efforts to re-stream the old plant, especially through a rehabilitation by Soimi SPA of Italy failed, so also was a last-ditch turnaround maintenance programme in 2000. Since the failed turnaround, the old refinery has been allowed to die off.

Apart from refining petroleum for export, the new refinery was also to produce raw materials for other sectors in the petrochemicals industry. The FCC and Alkalinisation units were to handle this purpose. But the Alkalinisation Unit never really got on stream.

The new refinery was programmed to undergo turnaround maintenance every two years. This happened successfully twice between 1989 and 1994. The third turnaround in 2000 was not very successful and since then operations at the refinery have been epileptic – up today, down tomorrow.

Then, the politics and economics of petroleum bunkering, product importation racketeering, pipeline vandalism and many other intrigues gradually crept in to cripple what was planned to be the catalyst of economic transformation of Nigeria.

In 2007, the Nigerian government under President Olusegun Obasanjo privatised the refinery and sold its 51 percent shares to Blue Star, a consortium of Dangote Oil and Gas, Zenon Oil and Transnational Corporation for $561million. The deal was resisted by the two oil company unions, PENGASSAN and NUPENG, who felt that the privatisation deal might not favour their members.

The stalemate was still raging when Umaru Musa Yar’Adua became President in 2007 through a flawed election. To win the support of the unions, Yar’Adua revoked the privatization and returned the refinery to NNPC.

It has been over four years now since the refinery shut down for the last time. In 2016, there was a plan to discreetly concession the refinery to two Nigerian oil companies to rehabilitate and operate. That move was scuttled when the Nigerian Senate got wind of it and queried it.

In its 32 years of operations, the new Port Harcourt refinery did not export one drop of refined petroleum. The only time refined products were moved by sea from Port Harcourt were to Calabar and Lagos for domestic distribution.

The new Port Harcourt refinery

Early this year, the Nigerian government raised hopes of Nigerians with an announcement that it had secured a loan of $1.5 billion to rehabilitate the Port Harcourt refinery in a deal that may end up transferring the refinery to private operators at the end of the rehabilitation. The contract for the rehabilitation was signed between the Nigerian National Petroleum Corporation (NNPC) and Tecnimont SPA of Italy.

Initially promised to start in April, the rehabilitation is expected to put the refinery in a position to boost domestic availability of petroleum products and save the country huge foreign exchange it spends on importing 100 percent of the legitimate fuel sold in the country (a lot of the petrol sold in Rivers State is got from illicit refineries that source crude oil from vandalised pipelines).

Thousands of young unemployed people in the country have also been looking forward to securing work opportunities in the rehabilitation that may last for four years. Poverty and unemployment levels in Nigeria, particularly in the Niger Delta areas have hit peak proportions.

Not able to achieve optimum production notwithstanding, operators and managers or the new Port Harcourt refinery didn’t quite lose everything. They enjoyed their full career cycle with full benefits.

Emmanuel Obe is a Port Harcourt-based independent journalist and public critique, publisher of Street Journalist on Facebook