NNPCL Signs $741 Million Deal to Rehabilitate Kaduna Refinery

The Nigerian National Petroleum Company Limited has signed a $741 million deal with Daewoo Engineering and Construction Company to restore an oil refinery in Kaduna state.

According to Bloomberg, NNPCL signed the maintenance contract with the South Korean engineering firm at a ceremony on Thursday.

A statement from the company said: “Under the terms of the agreement, Daewoo will restore production from the non-operating 110,000 barrels per day facility to at least 60 percent of its capacity by the end of 2024.

“The deal is part of the NNPCL’s effort to reduce Nigeria’s near-total dependence on imported fuel – long a source of embarrassment for the government of Africa’s largest crude oil producer.

“The company has also acquired a 20 percent stake in a massive 650,000 barrels per day complex being built outside Lagos by Africa’s richest person, Aliko Dangote, which is set to go into production later this year after repeated delays.

“The NNPCL currently imports Nigeria’s entire petrol needs – mainly through raw-for-fuel swaps with local and international merchants – which it then sells to retailers and wholesalers at a great loss,” it added.

The government has said it will scrap the costly subsidy in June, even though a new government will take office by then following elections scheduled for later this month.

“The NNPC will fund Daewoo’s “quick-fix” turnaround work at the Kaduna plant – which was commissioned in 1980 – through a mix of its own revenue and third-party financing,” the company said, without identifying any backers.

The company is already paying Italy’s Maire Tecnimont SpA to rehabilitate two state-owned refineries in the Port Harcourt oil center, which together have a capacity of 210,000 barrels per day. – Import bank.

“Once those facilities and another NNPC plant in the southern town of Warri resume production, the company will hire reputable third-party contractors to run them,” it said in the statement.