Oil and gas operators are lost faith in the ability of the Nigerian National Petroleum Corporation (NNPC) to keep the nation’s refineries running through period turn around maintenance (TAM).
To them, the TAM is futile exercises that only serve as conduit pipe through which the nation’s resources are wasted by both government and NNPC officials.
According to the operators, officials of NNPC “know very well that with the present state of the refineries the nation cannot achieve optimal production level even if they under go turn around maintenance on yearly basis.” They said most of the critical units that make up the plants are old and obsolete and can barely achieve 40 percent of their installed capacities, talk less of meeting the country’s demand for refined petroleum products.
Nigeria consumes about 40 million litres of Premium Motor Spirit or petrol on daily basis and 12 million litres of Automotive Gas Oil (AGO). But the combined total production capacity of the 450,000 barrels per day of the refineries is less than 10 million litres a day.
Warri Refinery has installed capacity of 125,000 barrels per day, Port Harcourt has 215,000 barrels daily capacity while Kaduna has 110,000 barrels capacity per day. Combined, they will all produce about 18 million litres of fuel per day working at 100 percent production level which is far from the national daily demand.
“The various units are just lacking in terms of capacity. They can barely satisfy their immediate operational areas,” a stakeholder said.
Experts said the best option is for completely new units to be installed for them to achieve maximum efficiency in terms of production. “It is only through this that the refineries can satisfy the yearnings of the Nigerians as regards supply of petroleum products,” another stakeholder stated.
Except the government invests heavily in the refineries the current palliatives would not work, they said.
The conversion rate of the refineries in the country is for below what is obtained in other parts of the world. The conversion rate is put at 82 percent as against 95 that is obtained in America and Eastern Europe.
Industry analysts said the minimum amount that can be spent on TAM that is, if the refineries maintenance takes place within the normal 18 months period is in the region of $10 million. That is, if everything goes as planned and the programme was not disrupted.
The Turnaround Maintenance (TAM) of Kaduna Refining and Petrochemical Company (KRPC) which has been divided into two parts namely: Material and labour, will cost the government about $60 million.
The previous TAM has not been quite successful due to poor material planning. The TAM is expected to be comprehensive so $35 million has been budgeted for materials and all the materials have been procured waiting for the commencement of the repairs while $25 million was budgeted for labour.