While in South Korea last week, President Muhammadu Buhari witnessed the signing of a letter of intent (LoI) between NNPC Ltd and Daewoo E&C for the revised strategy to fix the state-owned Kaduna Refinery in northern Nigeria.
According to officials, Daewoo E&C intends to complete the Kaduna refinery rehabilitation project by signing the official contract with the NNPC by the first quarter of 2023.
The Kaduna refining complex was developed in two major phases: the construction of the 110,000 bpd refinery in 1983, followed by a 30,000 tpy petrochemical unit in 1988. Various factors have severely impacted the operational efficiency of the refinery. Over the past 10 years, capacity utilization at the Kaduna Refinery has averaged only 13.87%. Future rehabilitation works the refinery site and on associated pipelines and depots are expected to bring back capacity utilization to 90% in the near future.
Daewoo E&C was already selected last June for the “quick fix” project at the state-owned Warri Refinery, under a contract worth $492.3m.
Both refineries were initially scheduled for full rehabilitation under a $1.484bn contract with Italian contractor Saipem, approved by the Federal Executive Council (FEC) in August 2021. However, the deal fell through and led to the restructuring of both initiatives as cheaper, “quick fix” projects executed by Daewoo E&C.
Meanwhile, Italian contractor Tecnimont is busy rehabilitating the state-owned Port Harcourt Refinery under a full-fledged, $1.5bn rehabilitation scheme that started in April 2021 and will last 40 months. In early June 2022, the Italian EPC contractor reached 1 million safe manhours without LTI at the site.
Details on the rehabilitation of Nigerian refineries are available in your Hawilti+ research terminal.