Warri refinery to resume end of January after 2 years

BusinessDay gathered that although the ruptured pipeline has been repaired, Warri Refinery would only restart by the end of January.

The resumption of the Warri and Kaduna refineries, with a combined capacity of 235,000 barrels per day, is expected to reduce the country’s $4 billion (N500billion) annual fuel import bill substantially and cut crude oil exports by about 200,000 barrels per day.

Meanwhile, the resumption of operations at the Kaduna Refinery and Petrochemical Company (KRPC) is hinged on the successful reactivation of the Warri refinery.

Mojeed Olayinka Agoro, managing director of KRPC who disclosed this exclusively to Businessday said only after Warri refinery has been restarted could crude oil be pumped to Kaduna. "Warri will has to be able to get crude and they have to make their level and when their tank is filled up, their plant will be restarted after which they will start pumping crude oil to us," Agoro said.

He however assured that Nigerians would soon leave a sigh of relief as the problem is being addressed holistically to ensure that production commenced without disruption due to technical hitches.

Agoro described the condition of the Kaduna plant as sound and the morale of the workers high

"We have steemed our columns because for the past two years, the plant has not been running. So we don’t want a situation where we put crude oil into the system and we have to come back again.

"So all efforts to get the system properly in shape for pre-commissioning after crude oil must has arrived is being done now.

"The columns are being repaired and the air coolers are being tested to make sure they can withstand the pressures and all these things will be completed by the 18th of this month.

The two refineries had operated at 70-percent and 75percent capacity before the Niger Delta militants damaged the pipelines on February 18, 2006.

Earlier attempts to repair the pipeline failed as attacks on oil and gas installations and kidnapping of expatriate oil workers in the area had dissuaded potential contractors from going to the scene of the damage.

"I talk of Chanomi Creek today; I cannot even find a contractor that will do this job for me. We started with Willbros. They withdrew because of the problem. We went to Saipem, but the cost has become an issue," lamented Funsho Kupolokun, former group managing director of NNPC.

However, the repair of the pipeline was completed last week as the government awarded the contract for its repair to a local contractor, while the Chanomi Creek communities were paid to guard the facilities.

With the repair of the pipeline, Abubakar Yar’ Adua, acting group managing director of the NNPC stated that the Warri refinery would resume operation next week while Kaduna refinery would re-open within the next three months.

He attributed the success in the repair of the pipeline to the award of the contract for its protection to the host communities.

But less than 24 hours after the repair work was completed, the pipeline exploded during pressure test thereby sealing the hope of the resumption of operations of the two refineries.

The supply of crude oil to Warri refinery, which had earlier commenced was also disrupted by the explosion.

Ajuonuma had attributed the pipeline explosion to saboteurs who wanted to steal crude oil.

The NNPC boss had earlier disclosed that turn around maintenance (TAM) would be carried out on Kaduna refinery within the next three months, while that of Port Harcourt would be done during the first quarter of 2009.

According to him, a $23-million (N2.8-billion) material needed for the operation at Kaduna is already in site, adding that the operation at Warri will be carried out during the second quarter of 2009.

Yar’Adua also disclosed that unmanned aircraft that would provide surveillance on oil installations in the country were already in Port Harcourt.

According to him, attempt to involve the military in the protection of the oil pipelines is facing legislative hurdles which would be soon sorted out.

He lamented that despite all the efforts made by NNPC to protect the pipelines and their right of way, some people have continued to vandalise these installations.

"Go to Okirika Jetty, the pipelines pass in front of people’s houses. We buy right of way for the pipelines but people go there and build houses. But when there is explosion they ask us to pay compensation," he said.