Nigeria’s state-owned NNPC will award rehabilitation contracts for the 110,000 b/d Kaduna and the 125,000 b/d Warri refineries by the end of July, the managing director Mele Kyari said.
NNPC aims to sign engineering, procurement and construction (EPC) contracts for the facilities within the next three weeks. It approved a $1.5bn rehabilitation of the 210,000 b/d Port Harcourt refinery earlier this year.
NNPC will not use any federal money to rehabilitate the refineries, said Kyari. It will instead secure bank loans and repay them through the facilities’ cash flows.
The same process will be applied to secure the purchase of a 20pc stake in the 600,000 b/d Dangote refinery, said Kyari. Lenders are evaluating investment in this facility, which will start producing in 2022, he said.
“As the national oil company of the country we have the responsibility to guarantee energy security,” he said of the rationale behind the investment, adding that it would be impossible for “any country to watch a business of this magnitude and sensitivity to run without the involvement of a national company.”
NNPC is also considering the construction of five condensate refineries, which will provide a cheaper alternative to produce light-end products. NNPC aims to reach final investment decisions on two, which will have a combined 200,000 b/d of condensate refining capacity, within the next three months.
“They are cheaper and faster to construct and they will also take off the burden of the Opec+ crude output restrictions,” Kyari said.