The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has added its voice to the controversy surrounding the functionality of the 60,000 bpd old Port Harcourt refinery, confirming that the facility is functional, but currently lacks the reformer unit critical to production of petrol.
Speaking on Arise Television, President of PENGASSAN, Festus Osifo, said the refinery had indeed commenced operation in full, but admitted that it is currently blending petrol, which he said is not peculiar to Nigeria.
Osifo, however, said that the absence of a reformer unit, may have made the Nigerian National Petroleum Company Limited (NNPC) to resort to blending of products.
THISDAY’s checks showed that Catalytic Reforming Unit (CRU), is a key part of a refinery that produces gasoline or petrol and can produce up to 37 per cent of a refinery’s fuel.
However, it was learnt that the downside is that the CRU can be very expensive, sometimes costing as much as the combined cost of installing two or three refinery trains.
Stressing that no refinery can produce with a single Crude Distillation Unit (CDU), Osifo said Nigerians have every reason to doubt and question government pronouncements, considering that they had been betrayed several times.
“Nigerians have every reason to doubt the government. We have every reason to question assertions from governments, because over the years, they have actually let us down. Having said that, for us in PENGASSAN, it’s part of what we are going to address tomorrow in our National Executive Council meeting (Tuesday).
“Really, from our checks, the Port Harcourt refinery is actually working. But let me explain this. In petroleum products production, you take the crude and you pass the crude into what they call the CDU (Crude Distillation Unit).
“So, it is actually that unit that is going to bring different products. That unit today, as we speak, is working. When you pass the crude into CDU, it is going to give you what we call Kerosene (DPK), it is going to give you what we call ATK (Aviation fuel), and it’s going to give you AGO (Diesel).
“It’s also going to give you naphtha. That is that distillation unit. That unit is working. What that means is that when you pass crude into that unit, you will have these products, but the old Port Harcourt refinery was not designed to produce aviation fuel.
“So, you are going to have these three principal products: Naphtha, AGO, as well as the DPK. So normally, that Naphtha, you are going to pass it to this unit called the Reformer Unit. As we speak today, that reformer unit is not actually working. We must disclose this to Nigerians.
“What is now happening at the moment is that you are going to take that Naphtha and merge it with Crack-C5. It will now be blended with Naphtha, and some other processes take place, and now it gives us PMS (petrol)
“What Nigerians should be interested in today is that is the Port Harcourt refinery producing AGO? The answer is yes. Is the old Port Harcourt refinery producing kerosene? The answer is yes. Is it producing PMS today? The answer is yes.
“We should reduce the concentration on what the processes are, but look at the products that come out. There is no refinery in the world that has a CDU that produces PMS in a single tranche. No one produces PMS, even Dangote Refinery.
“Their CDU doesn’t just produce PMS. But there is a product that comes out that is close to PMS. The requirement and the specification – what we call the Octane number in PMS – is very high. You have to produce it to spec or it damages vehicles. That Naphtha is further treated, and treating that Naphtha using the Crack-C5 from Indorama is what they now call blending.
“But in all honesty, the refinery is working, and these products are all there and coming out,” he stated during the interview.
Meanwhile, the oil output of the Organisation of Petroleum Exporting Countries (OPEC) rose for a second month in November, as Nigeria raised its production by 50,000 barrels per day, a Reuters survey has shown.
Libya’s production also recovered after resolution of a political crisis, seeing OPEC countries pump 26.51 million barrels per day last month, up 180,000 bpd from October.
OPEC+ is scheduled to meet on Thursday and could extend output cuts into 2025 in the face of global demand concerns and rising output outside the group, sources toldReuters. “Other increases of 50,000 bpd each came from Nigeria and from Iran,” the report said.
OPEC pumped about 16,000 bpd above the implied target for the nine members covered by supply cut agreements, the survey found, with Gabon exceeding its target by the largest amount.
The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, flows data from financial group LSEG, information from companies that track flows, such as Kpler and Petro-Logistics, and information provided by sources at oil companies, OPEC and consultants.
Also, oil prices rose more than 1.5 per cent yesterday as investors awaited an OPEC+ meeting expected to rubber stamp continued output cuts while a fragile ceasefire between Israel and Lebanon provided additional support.
Brent crude futures rose $1.16, or 1.6 per cent, to $72.99 a barrel, while US West Texas Intermediate crude was up $1.16, or 1.7 per cent, at $69.26.
OPEC+ is likely to extend its latest round of oil output cuts until the end of the first quarter when it meets on Thursday, four OPEC+ sources told Reuters. OPEC+, which accounts for about half of the world’s oil production, has been looking to perform a gradual unwinding of production cuts through 2025.
However, the prospect of an oil market surplus has exerted downward pressure on prices, with Brent trading nearly 6 per cent below its average for December 2023.
