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In this interview, Olufemi Soneye, Chief Corporate Communications Officer of the Nigeria National Petroleum Corporation Limited (NNPCL), clears the air on issues around blending and the production of petrol. He also speaks on the operational module of the Port Harcourt Refinery (PHR) with sustainability as a key component. Excerpts:
There’s been controversy about the refining and blending going on at the Port Harcourt Refinery regarding petrol production. What’s the truth?
Refining and blending are interconnected processes crucial for crude oil processing and optimizing refinery yields, especially when producing Premium Motor Spirit (PMS).
PMS is not a single product but a carefully crafted blend of various refinery outputs, including naphtha, reformate, pentane-plus hydrocarbons, and other middle distillates, designed to enhance value and meet consumer needs.
Blending operations are standard in refineries worldwide, with the process and ratios varying based on factors like crude oil type, refinery configuration, and specific fuel requirements (such as octane rating or sulfur content).
Don’t be swayed by individuals misusing technical terms they don’t fully understand to spread misinformation or hinder progress. Blending and refining remain essential and sophisticated components of modern fuel production.
Can you clarify the issue of purchase of reformate?
We did not purchase any reformate. Someone referred to an email that was dated August before the current start-up of the refinery in November. We didn’t purchase reformate.
The purchase did not go through at all. We were going to purchase reformate for blending. Reformate is a high-octane product derived from the catalytic reforming process in oil refineries. It is a critical component in blending high-quality gasoline. It was too expensive to purchase this reformate and it was going to impact our margin which will make our products to be sold at a loss. That’s why we didn’t follow through with it.
Let’s go back to the issue of blending. Is it normal and best practice for refineries to blend Naphta with high RON gasoline?
We are not blending SRG with Napthat. SRG is blended with Crack C5. Yes, it is normal practice to blend SRG with Crack C5. Straight-run gasoline blended with cracked C5 refers to a mix of two distinct gasoline components, typically aimed at optimizing fuel quality and meeting market specifications.
SRG is often blended with higher-octane components such as crack C5 to create commercially viable gasoline. C5 is derived from fluid catalytic cracking (FCC) processes, specifically from the lighter fractions of the cracked products. Our FCC is in the New PH refinery, and it is undergoing construction. Blending takes place in the FCC which is normal operation practice. Cracked C5 compensates for the low octane rating of straight-run gasoline, making the blend suitable for modern engines.
What caused the delay in getting the refinery going?
Execution of a revamp project in a brown field environment has a greater technical difficulty which is multiple times higher than in a green field. Unknown and unforeseen technical challenges impeded the commissioning and startup multiple times and took us back several weeks hence schedule delays.
How were the challenges surmounted?
We partnered with and drew on the wealth of experience from an external party who had carried out commissioning and startup, currently operating and maintaining several refineries. The injection of these additional, highly skilled and competent resources was the game changer. We also identified and mobilised retired NNPC staff who had worked in the refineries; their experience and expertise were useful. We carried out a detailed technical review to understand and identify areas of vulnerabilities; we put a system in place to eliminate and address the bad actors systematically.
NNPCL went mute for some time regarding the commencement date.
You would recall we had made several attempts to start up the PHR about six to seven times with dates. We felt there would be added pressure on the entire team once we announced a date, hence the reason why we made sure, based on lessons of the past, we went mute on commencement date to allow us sufficient time to ensure operations were stable.
Why the secrecy and suddenness of the launch?
There was no secrecy and suddenness of the launch. We had to ensure the OPHR 60kbblpd was stable after the commencement of operation and we had built up sufficient volumes of the products.
To what extent will this positive development impact the PMS space, going forward – in terms of pricing?
Port Harcourt Refinery – and any operating refinery in Nigeria – will contribute to supply security for Nigeria and reduce the dependency on importation and the related USD needed for those imports. Refineries also contribute to technology developments and employment.
Pricing will always be determined by market forces both inside and outside Nigeria, however, one could expect that using locally produced crude and reduction of imports reduce overall logistics costs.
What supply mechanisms are in place to ensure a smooth operation and avoid a repeat of the type of Dangote issue with IPMAN and MOMAN?
We have well-established ways of working with all market parties including IPMAN and MOMAN which will continue to apply also to any loadings from PH. That is, there is no need to establish new ways of working, just an extension for these to our PH location.
Read Also: Why Port Harcourt refinery is not producing — NNPCL
Warri and Kaduna should be the next focus. What’s at play?
The quick fix project of WRPC Area 1 (125kbopd) is in progress and expected to start operations first and subsequently the full plant. Construction work on KRPC (110kbopd) is progressing and is expected to come on stream as well.
What’s the operating model for the refinery?
Crude oil supply will be purchased from our NNPC Trading Company under sales and purchase agreement. Crude oil transportation will be via pipelines under the tariffing framework. Operations and maintenance (O and M), that is planned turnarounds and reliability engineering, will be outsourced to the external contractor based on a five-year contract. Planning and scheduling, Commercial, Supply Chain and Finance will be under Port Harcourt Refinery Company (PHRC). Product evacuation/offtake will be via NNPC Retail under the purchase agreement.
What guarantees can Nigerians get that the issue of failed maintenance that plagued the refinery in the past will remain in the past?
To ensure the sustainability of the historical operations of the OPHR 60kbblpd plant and the NPHR 150KBBLPD, NNPCL has put in place an interim Operations and Maintenance Contract to guarantee uninterrupted operations of Area 5. As you are aware we are about to finalise the five years O&M tendering process, this will finally put us on the right path to ensure we have the best contractor in the world working with NNPCL to ensure reliability and utilisation 210kbblpd refinery – this would ensure energy security to the country.
