NNPCL, Daewoo sign $740.6m deal for KRPC rehabilitation

Bisola David
Bisola David

The Nigerian National Petroleum Company Limited yesterday, signed with Daewoo Engineering & Construction Nigeria Limited a $740.6m deal for Kaduna Refinery & Petrochemical Company Limited to be rehabilitated.

LEADERSHIP News reported that the contract is a follow up to the memorandum of understanding for the rehabilitation of the refinery that NNPC and Daewoo Group of South Korea signed last October in Seoul, South Korea, in the presence of President Muhammadu Buhari and other senior government officials at 2022 World Bio Summit.

The KPRC Quick-fix Contract, worth US$740.6 million, is expected to be finished in 21 months and will allow the refinery to run at a minimum capacity utilization of 60%.

Group Chief Executive Officer of NNPC, Mele Kyari, stated that the oil company aims to restore 18 million liters of refining capacity with the Kaduna, Warri, and Port Harcourt refineries during the contract signing ceremony yesterday at the NNPC headquarters in Abuja.

He claimed that it is impossible for a developing nation to discuss energy security without bringing up petroleum products, and the only way we can ensure this is by restoring local refining capability.

“We are aware that about four refineries in three locations are down and each of them is undergoing some sort of rehabilitation process.

“We are committing to the Kaduna refinery today, and combined with Port Harcourt and Warri, we will eventually be able to produce 18 million liters of gasoline again. Both cities are currently on track.

“In the end, we are very, very hopeful that this country would be self sufficient in the delivery of petroleum products into our country, notably gasoline, according to Kyari, who added that this “will also complement the potentials at Dangote Refinery, where we have 20% stake.”

He expressed optimism that the plant would arrive on schedule and gave them assurances regarding the safety of their workers and property while they were in Nigeria.

“The largest state-run refinery which is in Port Harcourt, is currently undergoing repairs managed by Tecnimont of Italy. Kaduna Refinery, with a capacity of 110,000 bpd, is one of Nigeria’s four refineries that has not produced fuel for years, forcing the country to rely on imported petroleum products.

The executive vice president of NNPC’s downstream division, Adeyemi Adetunji, also expressed his gratitude for the opportunity to sign the refinery’s maintenance service agreement.

Mr. Adetunji said, “This represents a turning point in KRPC history, given that the refinery’s most recent Turn Around Maintenance was performed about 15 years ago.

He said that the project was framed following lengthy discussions with Daewoo about the quick-fix strategy to repair and re-stream KRPC and operate it sustainably at a minimum capacity utilization of 60%.

“Daewoo E&C Nigeria Limited shall execute this project in three work packages under a Maintenance Services contract with a maximum estimated cost ceiling of $740,669,600.00 and a 21-month duration.

“The quickest way to restart WRPC and KRPC for domestic manufacture of refined petroleum products is guaranteed by the quick-fix plan.

In light of the nation’s near total reliance on the supply of imported petroleum products and the effect the ongoing Russia-Ukraine war is having on global supply, he said, “Restoring WRPC and KRPC back to operation will guarantee energy security for the country and reduce dependence on imported petroleum products.”

He went on to say that the plan’s advantages included generating income, lowering the demand for foreign exchange, supplying companies with raw materials, giving Nigerians jobs, and ensuring technological transfer.

By Q4 2024, he continued, “The projected quick-fix initiative on KRPC is expected to return it to at least 60% of its nameplate capacity.”


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