From DENNIS MERNYI, Abuja
The Federal government has announced plans to increase the local production capacity of refined crude at the nation’s three refineries located in Kaduna, Warri and Port Harcourt to about 90 per cent of installed capacity by 2014, minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has said.
The minister who disclosed this at a meeting convened by the Senate Committee on Petroleum (Downstream) to find solutions to the shortage of petroleum products in some parts of the country caused by distribution challenges, explained that the planned Turn-Around Maintenance and upgrade of the three refineries could not hold as earlier scheduled because of the negative travel advisory given by the Japanese authorities to JGC, the original builders of the Port Harcourt Refinery which stopped them from coming for the upgrade and maintenance of the refinery.
“With that hurdle surmounted, we have put in place a new plan complete with new schedules and timelines to bring the refineries back to life and get them to run at higher capacity. The maintenance and upgrade work will start with the Port Harcourt Refinery, which has stayed the longest period without a turn-around maintenance,” she explained.
Alison-Madueke further stated that the contract for the project will soon be signed and that rehabilitation and upgrade work will move from the Port Harcourt Refinery to the Kaduna and Warri Refineries in that order until the last one “comes on stream by the beginning of the last quarter of 2014”.
Asked by the Chairman of the Committee, Senator Magnus Abe, to shed light on the cost implication of the project and the expected production figure at the end of the rehabilitation work, the minister put the cost of the maintenance and upgrade of the three refineries at $1.6 billion, adding that the refineries would produce at 90 per cent installed capacity.
On the fuel supply challenges, she explained that a mixture of factors ranging from unsettled subsidy claims which hamstrung some private product marketers from importing products and the breakage of the System 2B Pipeline at Arepo have made supply and distribution of products across the country difficult in spite of intervention through supplies from the strategic reserve.
She said the Department of Petroleum Resources (DPR), which is charged with the responsibility of monitoring and enforcement has been going round the country to ensure that marketers sell products at the approved price of N97 per litre and has closed 75 stations caught selling above the approved price across the country.