NNPC Opens Bid for Rehabilitation and Enhancement of Pipelines

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The Nigeria National Petroleum Corporation (NNPC) has open a tender and bid for rehabilitation, repairs and enhancement of some of the nation’s pipeline network including those running from the crude oil terminals located at Escravos and Bonny to the refineries.

It is expected that the interested private investors that will repair the pipelines and depots is to submit their bid before September 18, 2020. NNPC requires that the new pipelines would need intrusion detection systems, then deeply buried so as to stop theft or vandalism.

These pipelines, built almost 40 years ago, are very critical in the successful movement of crude oil to the country’s 3 Refinery complexes located in Port Harcourt, Kaduna and Warri, and the subsequent movement of the finished petroleum products to the consumers.

By design, the pipeline network in the country is to efficiently move crude oil from terminals located at Escravos and Bonny to Warri Refining and Petrochemical Company and Port Harcourt Refining Company.

Thereafter, refined petroleum products such as Premium Motor Spirit, Dual Purpose Kerosene and Automotive Gasoline Oil are moved from the Refineries to the product Depots for truck out.

However, this has not been the case due to continuous theft and vandalism, as well as ageing.

Because of the incessant vandalism, the NNPC had shut down the Refineries for repairs and upgrades.

The corporation said rehabilitation of the pipelines and associated Depots/Terminal Infrastructure will be done through a Finance, Build, Operate and Transfer model.

This model implies that the bidders for the extensive repairs of these pipelines would have to finance them independently and operate them for a defined period in order to recover their investment costs with throughput tariffs.

Recall that 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.

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