Port Harcourt refinery operating smoothly, trucks loading nonstop – Ogbuigwe
Following the erroneous belief in some quarters that the Port Harcourt refinery, which has just been revived by the NNPCL after 33-year hiatus, is not operational, the National President of the Nigeria Society of Chemical Engineers, Tony Ogbuigwe, in an interview with Arise TV, dismisses the rumour while affirming that he refinery is indeed operational. Emmanuel Akanni presents the excerpt
What are your thoughts about the allegations that the refinery has yet to commence full operation?
I am here as a professional and President of the Nigeria Society of Chemical Engineers. The truth is that Area 5 of the Port Harcourt refinery is running, and it is indeed running. Port Harcourt refinery has two parts, there is the old refinery and the new refinery. The old refinery has been brought back into operation. It is running, and we can confirm that it is running. We have made contact with our colleagues, the professional chemical engineers who are on the ground, and we can confirm that it is running.
Products are being produced from the old refineries and those products are being blended to give the PMS that we consume in our cars and diesel oil which we consume in trucks and which some of us use in our generators as well. Those products are indeed being produced, kerosene is also being produced, and that is the truth.
Take us into the heart of Area 5 with the expectations of Nigerians in mind, and why is there a delay?
Exactly as you referred to the Dangote Refinery, it has to be brought up in stages. It is the same that is happening in the Port Harcourt refinery. Crude oil comes into a refinery and goes in through the Crude Distillation Unit. There is distillation in the column, and products come out from the column at various levels. From the top is gas, which eventually goes in to give you your cooking gas and then the next level down is straight-run gasoline and the next level is heavy naphtha, then kerosene and then diesel and then crude oil which is at the bottom of the column. These are the straight products that come from the column, but they go for further processing in different parts of the refinery.
The heavy naphtha goes to what is called the catalytic reforming unit, which is then reformed into high octane stock because the light naphtha or straight-run gasoline is low octane and does not meet the spec of 1991, which is the standard for PMS. What happened is that Area 5 was commissioned as the main column. The crude distillation unit has been commissioned, and it is running as I said, and it is producing these products. However, the heavy naphtha, which should go into the catalytic reforming unit is the next unit, which will be brought on stream, and that is not yet on stream. Some people have been making statements in the media about a product called Crack C5 coming from Eleme Petrochemicals, saying that is what they have been loading. No. The truth is that Area 5, otherwise called the old refinery, is producing light naphtha, hard naphtha, kero, and light gas oil, which goes out as diesel and it is also producing fuel oil. Those things are then blended. The light naphtha is blended with the crack C5, which is obtained from Eleme Petrochemicals, and together, it gives you your PMS.
I am surprised people are saying loading hasn’t taken place, loading has taken place, trucks have been loading, and those trucks have gone out to supply the public. You can visit the refinery to confirm for yourself that what they are reporting is not true.
Is it not misleading for the NNPC to announce that it is producing at 70 per cent capacity and is producing PMS and at the same time blending PMS with naphtha?
It is not PMS that is brought into the refinery, it is Crack C5. Crack C5 is a high-research octane product that is a by-product of the Eleme Petrochemical processes. That is high-octane stock; that high-octane stock is then blended with naphtha, which is the lower-octane stock to give you the 1991 spec that you need for PMS. PMS is what you buy at the filling stations. That PMS is made from high-octane stock and low-octane stock. The high-octane stock that they have right now, because the CRU is not yet in operation, is the Crack C5 that is coming from Eleme Petrochemicals which is blended with light naphtha and that is giving you PMS. The refinery produces light naphtha, Kero, light gas oil also known as diesel and others and those go into storage. And from the storage tank, you do your blending to get the final product that the consumers outside are familiar with.
I What is the cost implication of blending compared to refining, which is the expectation of many Nigerians?
Let me explain again. There is a slight misunderstanding by the people. Every refinery does blending every day. In the refinery, we produce, as I told you, these products which are not the products you see outside, we produce LPG, we produce light naphtha, heavy naphtha, kerosene, light gas oil, heavy gas oil, and atmospheric residue. These are going into the storage tanks in every refinery.
Then, from those storage tanks, you will now start blending for the public because these things I have mentioned now are not the things that the public consumes. The public consumes PMS. What is PMS? PMS is a blend of light naphtha – which is a lower run by-product- with high octane products like Crack C-5, or when the Catalytic Reforming Unit starts, they will produce Reformate. Reformate is high octane stock. By the time the CRU starts, there will be no need anymore for the crack C-5 because the CRU produces reformate, which is high octane. The octane of reformate is about 94, 95, and 96, depending on the start of the run and the end of the run. That is what is then blended with light naphtha to give you your PMS.
You may have heard earlier that we produce light and heavy naphtha. The heavy naphtha is what is sent to the CRU to be reformed, and that is why it is called reformate. It is reformed in the Catalytic Reformer to give you reformate, which becomes high octane stock, which is then blended with light naphtha to give you PMS. Diesel, on the other hand, comes from lower down in the column. The light gas oil is blended with some portion of the heavy gas oil to give you diesel. What you call fuel oil used in power plants is made from the balance of heavy gas oil and atmospheric residue. I hope I have explained. Every refinery does this.
With the claim of 70 per cent capacity, what does this translate to for Nigerians in terms of how many litres per day, and would there be any impact at all in terms of pricing?
As far as I know, the refinery is running at about 60-70% right now. They are probably ramping up towards 90 as the gentleman you mentioned confirmed. Hopefully, when they ramp up to 90%, then, of course, there will be more products coming out. What I will be looking forward to would be for the catalytic reforming unit to be brought into operation as well, so that the refinery- Area 5- can fully optimise the crude oil that it is processing, and then you can have a lot more products reaching the public. As for the price at which they sell it because it is a refinery in the country, I am sure they are going to look at their production costs and what it is costing them to take it to the people, and then the price would be determined accordingly. What has been happening in the past is that all prices are being indexed to the price at which they were bought in Rotterdam. Rotterdam is the port that is used for the pricing of petroleum products when they are importing. So, because you get the crude oil from Rotterdam and then ship it to Apapa and then discharge it into bulk storage and from bulk storage it goes into the storage of various marketers and eventually to the filling stations, so there is a cost associated with all of this. There is a template that is used in determining the price of petroleum products. What we may hope is that since they are no longer having to transport these products from Rotterdam, we could see a little difference between the price it was before when it was being imported and now that it is being produced. That would depend on the efficiency of production and the cost that they are incurring in the process of producing the products.
What is the reason behind the differences between how both refineries (Dangote and Port Harcourt refineries) get their products?
As I explained earlier, when Dangote started, they also started just with their CRU, and they were running the product to storage. Over time, they then started the units that are downstream. They started the CRU, they started the FCC after some time, and so on. It was when they started the CRU and FCC that they were then making high-octane stocks, which they blended with light naphtha and then sent to storage. If you remember, that is exactly what happened. It is the same thing that is happening with Port Harcourt refinery Area 5. The only difference is that Area 5 is fortunate that right next to it is Eleme Petrochemicals company that produces Crack C5, which has an octane number of 95 to 97. That is the luck Area 5 has.
If you recall, Dangote did not immediately start selling PMS. They were selling diesel because diesel is your light gas oil as I explained. So, it took them time. They had to start downstream before they were able to start blending to give PMS. I hope you recall that transition in bringing products into the market.
Did NNPC rush their processes by not being clear with their communication?
Now I see where the slight confusion is coming from. If you recall, the first statement that we all heard was on the day they started loading trucks at the loading bay and they said they loaded PMS and diesel and that was the case because they already had that crack C5 in their storage tanks. For your information, I used to be the MD of Port Harcourt refinery in 2010.
We have two lines that link Eleme Petrochemicals with the Port Harcourt refinery. One of the lines takes what we call the propane-rich field from the Port Harcourt refinery to Eleme Petrochemicals while the other line brings back crack C5 from Eleme Petrochemicals to the Port Harcourt refinery. So, as soon as they started Area 5 and they were producing light naphtha and diesel, they were able to immediately start blending the light naphtha and crack C5 to make PMS and that is what they loaded out on Tuesday, Wednesday and Thursday. There was an issue and I had to speak with our colleagues who were there and they said they needed to do more blending of the balance of the light naphtha that was being produced with the crack C5 that they had in storage. So, they took the time on Friday to do that blending so that they would continue loading out. I think people misunderstood that it was not producing. No, loading out of product has to be done after blending. Let’s give the benefit of the doubt.
I think that the reality we are facing in the country today is that there is a trust deficit among us as a people but let us make all efforts again to be transparent in reporting and also believe when a transparent report is being given. It is like an elephant, when a blind man touches the trunk, this thing is very big. Another blind man touches the strut and says it is just like a pipe because he is not seeing the whole picture. People tend to misunderstand things and that leads to misrepresentation and wrong interpretation. Let us build trust on the side of the people and the side of stakeholders, and our country will be better for it.
