Nigerian National Petroleum Company NNPC in its recent post, has thrown open bid for interested investors to overhaul the nation’s long overdue pipelines and depots serving three oil refineries.
The three refineries situated in the nation major cities- Port Harcourt, Warri and Kaduna were built decades ago and are linked to these pipeline network for supply of crude oil from oilfields production platforms
Owing to these decades of non routine maintenance of these pipeline network notwithstanding series of what NNPC described as constant vandalism leading to crude oil theft and couple with due ageing, have left the pipelines in dire need of complete overhauling.
This project is expected to be operated on a public-private partnership basis as the bidders are expected to finance and execute the project, then operate for an agreed number of years before transferring back to the NNPC. In other words, the bidders for the extensive repairs of these pipelines would have to finance them independently and operate for a defined period in order to recover their investment costs with throughput tariffs.
It must be noted that this model is similar to the one that had been in place by the state oil giant for the refineries. The NNPC had also announced plans to get private investors to invest in the repair of the 3 refineries on a repair and operate basis, as they do not want to be involved in the management of these refineries.
The NNPC Group Managing Director, Mele Kyari, had said that the ultimate plan for these refineries was to allow it to run on the LNG model, where the shareholders would be free to decide on the fate of these refineries going forward.
It 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.
