KADUNA REFINERY IS VIABLE-NNPC
Minister for Petroleum,Mrs. Diezani Alison-Madueke
The Management of the Nigerian National Petroleum Corporation, NNPC, over the weekend debunked media reports alleging that the Federal Government was losing over N700 billion annually in projected revenue through the Kaduna Refinery as well as N12 billion on remuneration of staff whom the reports alleged were largely idle as the refinery was not functioning.
The report which came on the heels of an oversight visit to the Kaduna Refinery by the Senate Committee on Petroleum Resources (Downstream) earlier last week portrayed the 32-year old plant as a drain pipe.
However, the Group General Manager, Group Public Affairs Division of the Corporation, Dr. Levi Ajuonuma, in a press statement issued to journalists stated that the Kaduna Refining and Petrochemicals Company, KPRC, is a functional and viable Strategic Business Unit of the Corporation which is contributing immensely towards NNPC’s operations in the oil and gas industry in Nigeria.
Dr. Ajuonuma informed that though Kaduna Refinery had undergone a quasi turn around maintenance two years ago by Nigerian engineers which was generally believed to be inadequate for the refinery, credit must be given to the local engineers for running the refinery at 60 percent installed production capacity amid artificially induced challenge of incessant pipeline vandalism.
The NNPC spokesman affirmed that if not for pipeline vandals, Kaduna Refinery could run at 60 to 70 percent capacity utilisation on a sustained basis, adding that due to incessant pipeline vandalism the desired production level has remained unsustainable.
Yes KRPC has a lot of challenges owing primarily to the neglect of the past. However in the last several years the fuel plant has operated steadily at 60% throughput translating to a daily production of 1.5 million liters of PMS, 1.4 million liters of AGO and 0.65 million liters of kerosene, in addition to other products. The biggest problem however is crude oil supply which has become unreliable due to rampant pipeline breaks which on many occasions necessitated the shutdown of the refinery,Dr. Ajuonuma stated.
On the insinuation that a huge part of the plant has been converted to a container-making factory, Dr Ajuonuma explained: This is totally misleading. The fact is that Kaduna Refinery is the only plant among the nationâ’s refineries fitted with a tin and drum manufacturing section designed to package petroleum products for distribution to the rural areas. In addition, the plant produces drums for packaging lubricating oil for marketing companies like Oando, AP and Total Nigeria Plc. The point needs to be made, however, that this tin and drum plant has been there right from inception of KRPC in 1980.
Also on the issue of importation of crude, Dr. Ajuonuma stated: There is really nothing strange about that and this only applies to Kaduna Refinery. By design the plant is configured to receive both local light crude and heavy crude which is usually imported from Venezuela, Russia, Iran and some other countries under a swap arrangement to help KRPC in the production of lubricants and asphalts which cannot be achieved using our local crude. He stated that the 110 barrels per day Kaduna Refinery has the capacity to receive 60,000 barrels of local crude and 50,000 barrels of heavy crude imported and pumped through the Warri Escravos crude pipeline.Â
Dr. Ajuonuma dismissed reports that KRPC collects crude oil from PPMC without proper costing and stated that the business model KRPC operates is such that it receives crude oil from PPMC, refines it and hands over the products to PPMC for marketing while the refinery is funded based on cost recovery.
It is however important to point out that every barrel of crude oil received and processed is accounted for and we all know that the PPMC at various times has provided detail accounts of how the imported crude to the refinery is handled,â€� he said.
He appealed to the National Assembly to collaborate with the Corporation in its bid to increase local refining capacity by introducing apt legislation which will deter the incidence of pipeline vandalism, adding that no refinery will work if the pipelines are not secured.
“The NNPC has formulated a workable schedule of activities to revamp our traditional refineries and also boost local refining capacity via the construction of three Greenfield refineries in collaboration with some Chinese investors but all that may not yield the desired effect if our vital crude supply and product evacuation pipelines remain insecure,Ajuonuma concluded.