Port Harcourt Refinery
Miles away from Alesa-Eleme where Nigeria’s oldest Refinery is situated, one can see the orange tongue of flame teasing the Port Harcourt skies. One might liken it to the white smoke from the chimney on the roof of the Sistine Chapel at the Vatican announcing the selection of a new Pope. The flare sits in the sky announcing from afar the dawn of a new era at the refinery. In a way, it is a statement of defiance to those who had declared that the refinery will never work again. But it is also a statement of triumph over huge odds that have kept the refinery prostrate for so long.
It is evident from life within and the immediate environment that life has finally begun to return to the complex as the community used to know it. Not only is refining going on at the ‘old’ 60,000 bpd refinery (Area V), the extensive rehabilitation work at the ‘new’ 150,000 bpd refinery (Area I) is going on at the same time, with over 3000 workers contacted by contractors and sub-contractors busy with installation, welding, construction and other activities within the complex under the supervision of the 158-man workforce of the NNPCL.
Hundreds of kilometres of intricately laid new pipes are in place, replacements for the old ones which failed integrity tests in the process of rehabilitation. They can be seen, linking furnaces, Boilers, Tanks, and different pieces of machinery to one another. They crisscross the length and breadth of the complex, glistening in the sun, bringing in crude from afar, running it through the rigorous distillation process to split it into diverse fractions, sending out the different products to storage tanks, and after certification by the regulators, to the loading bay, from which they are eventually pushed to the market. It is a new day at the Refinery.
It is a new day here, and it is written on the faces of the Staff on the ground. There is a spring in the steps of Ibrahim Onoja, Managing Director of Port Harcourt Refining Company, who has worked through the challenging days of the COVID-19 lockdown to this point where products are finally being rolled out. He could barely contain his joy as he proudly showed us around the complex, taking us through the complexities of refining from crude, and processing different products to the point of loading petrol into the tankers at the loading bay. He took particular pride in the new power plant at the refinery, which generates 72MW, making the refinery self-sufficient, and able to meet its needs and ancillary services within. The turnaround of the Port Harcourt Refinery is a case of triumph over huge odds by a crop of determined and dedicated Nigerians under the leadership of Mele Kyari, the Group CEO, Bayo Adenrele, MD, NNPC Refineries, and Ibrahim Onoja, MD, PHRC.
The journey of the Port Harcourt Refinery to this point where the wheels are beginning to roll again is long. The official name is the Port Harcourt Refining Company (PHRC), a subsidiary of the Nigerian National Petroleum Corporation Limited (NNPCL). PHRC operates two refineries: the old 60,000 barrels (per stream day) plant commissioned in 1965 and the new 150,000 barrels (per stream day) plant commissioned in 1989, originally intended to serve as an export refinery.
While the old refinery comprises of a Crude Distillation Unit (CDU), a Catalytic Reforming Unit (CRU), and a liquefied petroleum gas (LPG) plant, the new refinery includes a Crude Distillation Unit (CDU), a Vacuum Distillation Unit (VDU), a Naphtha Hydrotreating Unit (NHTU), a Catalytic Reforming Unit (CRU), a Continuous Catalyst Regeneration Unit (CCR), a Paraffin Hydrotreating Unit, a Fluid Catalytic Cracking (FCC) unit, Butamer Isomerisation unit, HF Alkylation Unit, Fuel Gas Vapouriser, Sour water and Caustic treatment units, and a Dimersol unit for converting propylene into a petrol blend product.
The old refinery was designed to process TNP, a blend of Medium Nigerian Crude oil, while the new refinery can process third-party crude oil. It has its own utilities and tank farm. It is designed to generate its gas as process fuel, supplied by processing LPG from storage through the LPG plant. The design expectations were 33% gasoline, 42% middle distillate with just 19% fuel oil, and 5% for fuel loss, plus 1% LPG.
As has been well documented, the Port Harcourt refineries, along with the ones in Kaduna (110,000 barrels per stream day) and Warri (125,000 barrels per stream day), bringing the combined plate capacity for Nigeria’s four refineries managed by the National Oil Company, NNPC, to 445,000 barrels per stream day, have, on account of poor maintenance of facilities and a combination of other factors been operating in fits and starts since the 1990s. The capacity utilisation in the refineries was so abysmal that it dropped as low as 4.85% in 2015 and 5.98% in 2018, with several attempts at turnaround maintenance of the refineries making little or no impact. By 2019, they were all largely shut down, with Nigeria fully dependent on the importation of refined products.
It was against this backdrop that the Buhari administration in 2021 decided on a full rehabilitation of the refineries, starting with the Port Harcourt Refinery, with contract awarded to Tecnimont S.p.A. to undertake Engineering, Procurement and Construction (EPC) activities “for a full rehabilitation of the Port Harcourt refinery complex, aimed at restoring the complex to a minimum of 90% of its nameplate capacity” at the cost of $1.5bn. The project was expected to be delivered, according to Tecnimont, in “phases from 24 and 32 months and the final stage will be completed in 44 months from the award date”.
The decision by the government was not well received by many, with Mr Atedo Peterside, advising the federal government to halt the “brazen & expensive adventure.” But that advice was not heeded and the project did proceed, even as it has not kept to the timeline agreed. Experts explain the delay to post-COVID disruptions in manufacturing and logistics around the world, which hampered the timely delivery of different projects, especially those of such magnitude in different parts of the world. In addition to that are the peculiarities and challenges with brownfield projects. It was not until December 2023 that the mechanical completion of the Old Port Harcourt Refinery (Area 5) was announced, which was said to have signified the closure of the construction and installation phases.
That would be followed up by the announcement at the end of last month of the successful re-streaming of the old Refinery, “signalling the commencement of crude oil processing from the plant and delivery of petroleum products into the market”. While that news was received with excitement by many Nigerians, that would herald a bout of negative reports from other quarters, who have continued to question the claims, with a Television presenter, Rufai Oseni, and the Economist, Kelvin Emmanuel being at the vanguard of the pushback in the media that the refinery is functioning, with the core of their argument being that what is in place is a “blending plant” rather than a refinery. Even when industry experts have repeatedly explained to them that blending is a part of the refining process and that what is being done at the plant is not out of the norm, they have continued to insist otherwise.
Kelvin Emmanuel insists that the Port Harcourt Refinery is not refining, and that “they basically relocated the Malta blending business to Port Harcourt”. He says, “The truth is coming out gradually. Area V is not a refinery, it’s a blending plant. Meaning that SRG that’s used as the main chemical component for curing with C5 is not produced there but imported into Okirika jetty,” arguing that, “you cannot produce SRG without a functional Vacuum Distillation Unit (VDU)”, a claim disputed by a Process Engineer, A.M. Yakubu, who insists that “…you don’t need VDU to process VRG.”
Kelvin Emmanuel maintains that the refinery “doesn’t have a catalytic reformer to convert those petroleum resins from the CDU into higher distillates, hence you need to blend the C% with imported Ron”, a claim which elicited this response from someone: “Oga, a CRU does not refine naphthas into PMS. A CRU converts paraffins to isoparaffins and cyclic naphthenes. Upon hydrogenation, one gets high-octane aromatic hydrocarbons (reformates) These are premium blending stock for high-octane gasoline”.
Arise TV Presenter, Rufai Oseni, had raised the alarm on NNPCL using Crack C5 to blend Naphtha (“Earlier today as I guessed NNPC was using Crack C5 to blend naphtha and called it PMS and I was correct, the Nigerians that abused me are quite gullible. I was correct”). But the NNPCL had itself disclosed that it was using Crack C5, sourced from its sister company, Indorama Petrochemicals to blend Straight-Run Gasoline (Naphtha) into Premium Motor Spirit to meet the required specifications, in what was described as “a standard practice in refineries globally, as no single unit can produce gasoline that fully complies with any country’s standards without such processes”.
Experts, including the President of the Nigerian Society of Chemical Engineers, Tony Ogbunigwe, have stated, that what Rufai suggests to be an aberration is standard practice. As Eze Nwakabeiya explained, “Premium Motor Spirit (PMS), commonly known as gasoline or petrol, is primarily a product of refining. It is produced through the refining process of crude oil. Specifically, through fractional distillation and additional processing steps like catalytic reforming, alkylation, and blending to meet quality and performance standards. However, the final gasoline product, including PMS, is often blended to achieve specific characteristics such as octane levels, vapor pressure, and emissions standards.” It is said that the specific composition of the PMS can vary, depending on the refinery, region, and regulatory requirements that apply. The point, however, is that Naphtha and C5 are common components of high-quality PMS, as they contribute to the fuel’s overall performance, efficiency, and octane rating.
A commentator remarks: “It is truly a significant achievement and a source of pride if the Port Harcourt refinery has a functioning cracking unit… not all refineries are equipped with the capability to perform cracking, whether through thermal methods (using high temperatures) or catalytic methods (using catalysts to lower reaction energy requirements). Having a cracking unit means a refinery can handle heavier hydrocarbons and efficiently convert them into lighter, high-value products, which is a hallmark of advanced refining technology. If the Port Harcourt refinery now possesses such a capability, it is a clear indication that the turnaround maintenance (TAM) carried out on the facility has been effective”.
But Kelvin has also queried the source of supply of the crude oil being processed at the Port Harcourt Refinery, arguing that “the 60-km distribution pipeline from Bonny terminal to PH1 that should supply crude oil to the refinery is not operational because of leaks and vandalization. So if you’ve been barging crude in 5k barrels batches, and evidence does not suggest there’s actual supply of feedstock, where are you delivering the crude to for the frivolous claim of a refinery. Unless of course, the off-spec Ron 94 that is ‘dross’ and heavy in sulphur was landed at Okirika Jetty and was sent to PH1 for curing with naphtha condensates.”
Information is however available in the public space of Shell Petroleum Development Company (SPDC) announcing in February this year of the completion of a “supply of over 475,000 barrels of crude oil to the Port Harcourt Refining Company Limited from the Bonny Oil and Gas Terminal” after what it described as “a prolonged outage of over five years during which the refinery underwent rehabilitation and integrity activities on its supply pipeline from the terminal.”
Kelvin might have missed this development that SPDC, at the time, described as a “significant step in the nation’s renewed efforts to utilise key infrastructure to assure the steady supply of products from the refining company to the Nigerian market.”
Even with all the information provided by Experts, the Economist continues to insist that “blending is not the same thing as refining because you need a CRUDE DISTILLATION UNIT to crack naphtha into higher distillates like PMS.” He does not appear to agree with the expert who has argued that cracking, which is “a chemical process that breaks down larger, heavier hydrocarbon molecules into smaller, lighter ones, (e.g., naphtha into gasoline) occurs in units like the FCCU or hydrocracking units, not in the CDU,” as he has maintained.
In response to his argument that what is taking place at the Refinery is not refining, another commentator charges: “Cracking of hydrocarbons, is that not a form of refining? Cause it’s not done to the PMS stage that makes it not a refinery? Whether you use direct crude oil or Crude oil distillate Naphtha, you can get PMS. Naphtha is an elevated step in the cracking process than direct crude. It’s like you are trying to make scrambled eggs directly from your kitchen with fresh eggs or using scrambled egg mix.”
Checks by reliable external sources, however, suggest that the Crude Distillation Unit (CDU) at the Port Harcourt refinery is running, “with their in-house crude stocks data suggesting that test runs have been going on “with PPMC inventories dropping from 1.5 Mbbls in August to 1.3 Mbbls in October to around 1 Mbbls in November.” Reports also affirm that the Port Harcourt Refining Company has sold its first LSSR cargo at a $8.50/t discount to the NWE 0.5% benchmark on an FOB basis, “with a sulfur content of 0.26% % wt and a 0.918 g/ml density at 15°C, to Dubai-based Gulf Transport & Trading Limited (GTT), loading onboard the Wonder Star MR1 in the coming days.”
But what one would see as further confirmation of refining in Port Harcourt is dismissed by Kelvin Emmanuel, who dismisses this report as ”semantics to force people to believe a lie that you have a refinery. I’m quite certain that if cflow cargo and vessel tracking monitors that tanker, it will find that the consignment is transhipped somewhere in Central Europe and re-routed back Nigeria.”
Perhaps it is the confusion of blending as it is in the industry register with what TV pundits assume it to mean that has led to the protracted argument. But the GCEO of NNPCL, Mele Kyari, explains that “blending is necessary to bring products to the specification of different countries or regions. Every refinery blends because what is on the specification in the United States of America will be off-spec in Nigeria and elsewhere. If you don’t blend, you will bring out off-spec products which will destroy your vehicles.”
A fact-finding mission in the company of journalists, and industry experts, including members of the Nigerian Society of Chemical Engineers took us around the facilities for a first-hand experience of a functioning old refinery and concerted efforts to get the new refinery back on its feet. The quality of the flare, according to the experts, spoke to the high level of efficiency of the plant, with its minimal conversion loss evidence that this was a completely revamped refinery, with new pumps in place, and a new control system. It is reassuring that the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is permanently on site to vet that the products meet the standard and specifications.
Some have raised questions on the timing of the commencement of operation of the Port Harcourt Refinery, citing it as an attempt to sabotage the Dangote project. That is strange, given that the Buhari administration in giving support to the Dangote Refinery project did so without losing sight of its responsibility for the state-owned refineries, which was why it committed itself to the rehabilitation of the four refineries by awarding those major contracts. The Tinubu administration has only followed up on that by extending more support to NNPCL in delivering on its mandate of fully revamped refineries. With all the public and private refineries functioning, the availability of products will not only be guaranteed, but Nigeria will also establish itself as a net exporter of refined petroleum products, and hopefully, prices of products in the domestic market will drop as well, even with the exchange rate being a major determinant, if only marginally.
It was heart-warming to see the raw determination of the dedicated Nigerians on-site directly responsible for the rehabilitation work at the Port Harcourt Refinery and their resolve to make things work. The level of interest in the refinery, and even the disputation that has arisen, is proof, Femi Soneye says, that Nigerians have a sense of ownership over what is a collective asset, which is how it should be. It is difficult to visit the Eleme Complex and not be inspired by the dedication of this team there, seeing how they have toiled to turn around the fortunes of the refinery, to make the old new again.
Simbo Olorunfemi works for Hoofbeatdotcom, a Nigerian communications consultancy and publisher of Africa Enterprise. Email: [email protected]
