NNPCL signs $741m deal to rehabilitate Kaduna refinery – Out Source

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

According to Bloomberg, NNPCL signed the upkeep service contract with the South Korean engineering agency at a ceremony held on Thursday.

In a press release issued by the corporate, it learn, “Under the phrases of the settlement, Daewoo will restore manufacturing on the inoperative 110,000 barrels-a-day facility to at the least 60 per cent of its capability by the tip of 2024.

“The deal is a part of the NNPCL’s efforts to scale back Nigeria’s close to complete reliance on imported gasoline — lengthy a supply of embarrassment for the federal government of Africa’s largest crude producer.

“The firm has additionally acquired a 20 per cent stake in an unlimited 650,000 barrel-a-day complicated being constructed exterior Lagos by Africa’s richest particular person, Aliko Dangote, which after repeated delays could enter manufacturing later this yr.

“The NNPCL currently imports the entirety of Nigeria’s gasoline requirements — mainly via crude-for-fuel swaps with local and international traders — which it then sells at a steep loss to retailers and wholesalers,” it added.

The authorities has stated that it’s going to take away the pricey subsidy in June, though a brand new administration can be within the workplace by then following elections scheduled for later this month.

“The NNPC will finance Daewoo’s “quick-fix” turnaround work on the Kaduna plant — which was commissioned in 1980 — by a mixture of its personal income and third-occasion financing,” the corporate stated, with out figuring out any lenders.

The firm is already paying Italy’s Maire Tecnimont SpA to rehabilitate two state-owned refineries within the oil hub of Port Harcourt which have a mixed capability of 210,000 barrels a day, primarily funding the challenge with a $1 billion mortgage from the Cairo-headquartered African Export–Import Bank.

“Once those facilities and another NNPC plant in the southern city of Warri resume production, the company will hire reputable outside contractors to run them,” it stated within the assertion.