June 21, 2024

Rehabilitation of Kaduna refinery begins in 2023, as NNPCL, Daewoo E&C sign intent letter for quick-fix

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Oredola Adeola

The NNPCL has signed the Letter of Intent (LOI) presented by the Daewoo Engineering and Construction (Daewoo E&C) for the revised strategy of quick–fix maintenance service contract for the Kaduna Refining & Petrochemical Company (KRPC).

President Muhammadu Buhari on Thursday in Seoul, South Korea, witnessed the signing of the Memorandum of Understanding (MoU) between  Malam Mele Kyari, Group Chief Executive Officer (GCEO) Nigerian National Petroleum Company (NNPC) Ltd and Seung-II Cho, President, Daewoo Group of South Korea for the rehabilitation of the Kaduna refinery.

EnergyDay gathered that the Kaduna Refinery, a subsidiary of NNPC,  which was shut down almost two years ago, is a 110,000 barrels per day oil refinery built by Chiyoda System Technologies Corporation, a Japanese company in 1983.

Over the years, billions of Naira have been spent on Turn- Around- Maintenance(TAM) and  salaries of workers of refineries, despite its present state.

In a statement by Femi Adesina, Special Adviser to the President, Media & Publicity, obtained by EnergyDay, the President gave assurance that ongoing rehabilitation works at Warri refinery by the same Daewoo Group is expected to deliver fuel production before the first half of 2023.

President Buhari said, “Daewoo Group has massive investments in the automobile, maritime and other sectors of our economy. I am also aware that Daewoo is currently engaged in the execution of the NLNG train seven project and also constructing sea-going LPG vessels for NNPC and her partners.”

He said he looked “forward to the delivery of ongoing projects, especially at the Warri and Kaduna refineries, and the NLNG Train Seven,” stressing that “This no doubt will open many more windows of opportunities for Daewoo and other Korean companies in Nigeria.”

President Buhari further noted that with the letter of intent, Daewoo and Nigeria have secured a track record of participating in the emergency repair work for aging oil refineries and expansion of new oil refineries, and have increased the possibility of expanding into the consignment operation of oil refineries in the future.

 Wonjoo Won-joo, Vice Chairman of  Daewoo E&C, said that his company has executing over 70 projects in Nigeria in the country within the petrochemical and medical sectors, since 1983.

He emphasized that Daewoo has contributed to the development of human resources through projects including the award of scholarship programmes to Nigerian students as well as vocational training for locals in oil producing states.

He however appealed for Nigerian Government’s support for the ongoing NLNG Train7 construction and emergency repair work for the Warri oil refinery, which was contracted in August, 2021, as well as support for participation in new projects in the future.

The Daewoo E&C official further noted that his company has 40 years of know-how and technological competitiveness experience garnered in Nigeria.

EnergyDay’s check showed that the Daewoo E&C plant’s business division team is expected to return Nigeria for a working visit, inspect the refinery and submit a business proposal  to negotiate the construction price before the end of 2022.

Findings by our correspondent showed that the emergency repair work for the Kaduna oil refinery will be performed exclusively by Daewoo E&C, after the conclusion of the scoping work.

The contract will be awarded  in the form of a private contract, which is expected to be agreed between NNPC and Daewoo in final contract negotiations by the first quarter of 2023.
EnergyDay gathered that Daewoo E&C is also the contractor handling the quick fix project of the Warri Refinery & Petrochemical Co. (WRPC).
The total construction cost for that project was approximately US$492.3 million and the construction period is from August 2022 to December 2023.
Our correspondent gathered that among the three construction packages for the refinery, deadlines for packages 1 and 2 have been confirmed. The two sides will set the deadline for package 3 through consultations in the future.

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