September 29, 2009

Chanomi pipeline repairs may herald early restart of Kaduna, Warri refineries — NNPC

By Oscarline Onwuemenyi
ABUJA — THE Nigerian National Petroleum Corporation has said it expects to resume production at both the Kaduna Refining and Petrochemical Company and the Warri Refining and Petrochemical Company by the second week of October, with the near completion of repair works on the Chanomi Crude Pipeline.

This was disclosed in an interview by the Group General Manager, Public Affairs NNPC, Dr. Levi Ajuonuma, in Thursday in Abuja , who announced the expected completion of the repairs of the Channomi Crude Pipeline which was vandalised by Niger Delta militants on May 25, 2009 at the height of the hostilities with the Joint Military Task Force.

The Channomi Crude Pipeline supplies crude oil to the Warri and Kaduna refineries and had suffered recurrent attacks by militants, which had militated against the efficient performance of the refineries. The repair was conducted by teams from the Pipelines Products Marketing Company, a subsidiary of NNPC, the Joint Military Task Force and the local community from Escravos in Delta, who took advantage of the cessation of violence in the region.

According to Ajuonuma, the repair of the Channomi Creek Pipeline would be completed by the first week of October, after which the lines will be tested for some days before the pumping of crude oil to the refineries could resume.

He explained that after the last incident, the WRPC was shut after it exhausted the crude oil that was reserved in its storage tanks.
KRPC, on the other hand, was originally shut on November 15 2008 to allow for its first turn around maintenance after ten years was restarted briefly in July on the conclusion of TAM.

The plant however, operated for 23 days, using up the crude oil that was reserved in its storage tanks before the start of the TAM.
He also noted that the Port Harcourt Refining and Petrochemical Company, which had a problem with its power plant, had been fixed and the managers of the plant were preparing to start it up.

Our correspondent gathered on Thursday that the Federal Government was hoping to get the refineries back on stream before it can implement the deregulation of the downstream sector of the industry.

This would ensure that a reasonable percentage of the local consumption would be refined locally, thereby reducing the costs associated with imported petroleum products to be borne by consumers.

The Petroleum and Natural Gas Senior Staff Association of Nigeria and the National Union of Petroleum and Natural Gas Workers that backed the deregulation, had also clarified that it would only support the policy if the deregulated petroleum products are refined locally.

NNPC has also initiated plans to sell some stake in its refineries in the Warri, Port Harcourt and Kaduna refineries as a strategy to help it improve the performance of the plants and become profitable under the ongoing oil and gas reforms.

The GMD of NNPC, Mr. Sanusi Barkindo stated that a new model of international standard will be introduced to accommodate the coming of third_party investors.

Barkindo explained that the model was not privatisation but a form of partnership where third_party investors will bring in capital, technology and managerial expertise as partners in running the refineries.