Nigeria Opens Tender for Pipeline, Depot Repairs
Nigeria National Petroleum Corporation, NNPC has invited investors to bid to fix pipelines and depots serving its three major oil refineries.
The pipeline network is crucial to getting crude oil to Nigerian National Petroleum Corporation’s three refinery complexes, and moving the finished fuels to consumers.
Bidders for the projects would have to finance them independently and operate them for a “defined period” while they recovered investment costs, and were compensated for their work, with throughput tariffs, information on NNPC’s website said.
The information added that the new pipelines would need “intrusion detection” systems, in addition to deep burial, to stymie theft or vandalism. Submissions are due by Sept. 18.
Authorities of the national corporation have often complained that the oil pipelines suffered incessant damage from oil thieves and vandals, in addition to ageing, resulting to huge theft have left the oil pipelines in need of extensive repairs.
The refineries themselves have run only sporadically, and NNPC shut them down earlier this year while they await repairs and upgrades. It said on Tuesday that those projects would be handled separately.
Nigeria, Africa’s largest oil exporter, has made producing its own fuels a core priority for years, but several efforts in recent time to revamp the refineries have failed, leaving it almost wholly reliant on imports.
Two months ago, the NNPC boss, Mallam Mele Kyari, has explained why the country has not been able to successfully fix the refineries after about 20 years of trying to do that. According to him, the failure to fix the refineries over these years was a strategy problem, as they never knew what they wanted to do with it.
He said that the corporation didn’t get the right advisory services and the right strategy to go through with it. Speaking during a virtual conference, organized by Atlantic Council, Kyari said that it was difficult to explain why an oil-producing country like Nigeria would become a net importer of petroleum products.
“This reason is very simple, we couldn’t fix our refineries and that’s very difficult to explain. Why can’t we fix our refineries? We started this very many years ago. For 20 years, all attempts to fix the refineries failed for very simple reason, there is a strategy problem.
“First, we never knew what we wanted to do with it; we didn’t get the right advisory, the right strategy to go through this. And we started a process 4 years ago to getting oil traders to come and help us fix this, that never worked. We also have the strategy to make sure that we get in the original refinery builders to help us do it.
“That is not their job. It’s just like you are buying a car and saying that Toyota must come and repair it for you, that doesn’t work anywhere,” Kyari said. Going further, Kyari said that the country has changed its strategy to make sure that they have a new framework.
The framework is to help the corporation and also the investors to put their money into it and ultimately change that equation. He said the way to go is to first fix the refineries as they have set a target for that and have a clear strategy for achieving it.
By Chibisi Ohakah, Abuja