- South Korean firm will restore Kaduna plant to 60% capacity
- Contract part of efforts to reduce reliance on fuel imports
Nigerian National Petroleum Co. Ltd signed the maintenance
service contract with the South Korean engineering firm at a ceremony held on
Thursday, the state-owned company said in a statement. Under the terms of the
agreement, Daewoo will restore production at the inoperative 110,000
barrels-a-day facility to at least 60% of its capacity by the end of 2024, it
said.
The deal is part of the NNPC’s efforts to reduce Nigeria’s
near total reliance on imported fuel — long a source of embarrassment for the
government of Africa’s largest crude producer. The company has also acquired a
20% stake in a vast 650,000 barrel-a-day complex being built outside Lagos by
Africa’s richest person, Aliko Dangote, which after repeated delays may enter
production later this year.
The NNPC 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. The government has said that it will remove the costly subsidy in
June, even though a new administration will be in office by then following
elections scheduled for later this month.
The NNPC will finance 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 state company said, without identifying
any lenders.
The company is already paying Italy’s Maire Tecnimont SpA to
rehabilitate two state-owned refineries in the oil hub of Port Harcourt that
have a combined capacity of 210,000 barrels-a-day, mainly funding the project
with a $1 billion loan 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 said in the statement.
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