Korean construction company Daewoo Engineering & Construction has secured a $741 million contract with the Nigerian National Petroleum Corporation (NNPC) for the rehabilitation of the 110,000 barrel per day (bpd) Kaduna Refinery.
As per the terms of the quick-fix repair contract, Daewoo will be responsible for restoring production at the facility to 60% of its total capacity by 2024, thereby significantly improving fuel security in the West African nation.
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According to Adeyemi Adetunji, Executive Vice President, Downstream of the NNPC, “This project shall be executed in three work packages as a maintenance services contract by Daewoo E&C Nigeria Limited, at an estimated maximum cost ceiling with a duration of 21 months.”
The awarding of the contract follows a memorandum of understanding signed between the parties in October 2022, and falls under a $1.4 billion package approved by the Nigerian Federal Council in August 2021 for the rehabilitation of both the Kaduna and Warri Refineries in Nigeria.
“The quick-fix strategy guarantees the fastest route to re-streaming Warri Refinery and Kaduna Refinery for in-country production of refined petroleum products. Restoring Warri and Kaduna back to operation will guarantee energy security for the country, reduce dependence on imported petroleum products in view of near total dependence on supply of imported petroleum products and the impact the ongoing Russia-Ukraine war is having on global supply,” Adetunji added.
Both Kaduna and Warri’s upgrades represent part of the NNPC’s broader energy security strategy which targets production resumption at each of the three existing refineries – Kaduna, Warri and Port Harcourt – as well as the completion of the new Dangote Refinery in Nigeria.
The Kaduna Refinery is set to complement production at the country’s biggest refinery, the 650,000 bpd Dangote Refinery, which in itself is nearing completion.
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With the upgrades, Adetunji emphasized that a series of benefits will be unlocked, including increases in revenue generation, the reduction in demand for foreign currency, new supply of raw materials to industries, enhanced employment opportunities as well as advancements in technology transfer.