Nigeria's Port Harcourt refinery restarts, product pipeline fixed

Nigeria's Port Harcourt refinery has started ramping up production following maintenance, state oil company Nigerian National Petroleum Corporation (NNPC) has said, a key development to help the cash-strapped country reduce costly fuel imports.
NNPC also said it had repaired a pipeline carrying gasoline to Lagos that it was forced to shut after an explosion last week near the town of Arepo in southwestern Ogun state.
Nigeria has a refining capacity of 445,000 barrels per day from three refining companies. An 18-month phased rehabilitation began in October 2014, meant to allow the refineries to keep running for most of the period.
But due to a lack of crude supplies from the state oil company, the whole system has been shut down since the last quarter of 2014. The private firm that delivers the feedstock by sea said NNPC stopped supplying them in November for unknown reasons.
The rolling upgrade is expected to finish around March 2016, a senior source at NNPC familiar with the matter said.
President Muhammadu Buhari has made revamping the refineries a priority after years of neglect under previous administrations.
Africa's biggest crude producer has been hit hard by the sharp drop in global oil prices last year.
EXPENSIVE IMPORTS
Buhari hopes to significantly reduce the country's dependence on expensive gasoline imports brought in via an expensive graft-ridden subsidy scheme and crude-for-product swap contracts that are being investigated for potentially short-changing the government.
The 125,000 bpd Warri refinery was the first to ramp up in early July and is expected to run at about 60,000 bpd, the head of NNPC refining said earlier this month.
The Port Harcourt Refining Co consists of two plants but only the newer one has resumed and will run at about 90,000 bpd of its 150,000 bpd capacity.
Most of Nigeria's refining capacity is in the oil-rich delta region but it has a northern plant in Kaduna, expected to restart towards the end of August. Only one of its two crude distillation units will run at about 30,000 bpd as the other requires foreign crude oil.
Combined output is expected to supply 8 million liters per day of gasoline or 20 percent of domestic demand in the near term.
The older plant at Port Harcourt with a 60,000 bpd is expected to restart towards year end, the NNPC source said.
Further ramp-ups will be hampered by dilapidated infrastructure. A 2012 report by the National Refineries Special Taskforce, citing consulting firm Aon Energy Risk Engineering, said nearly $9 billion would be needed to repair the supply and distribution chain across the country.