Nigeria’s state energy company Nigerian National Petroleum Company (NNPC) has awarded a $741m contract to South Korea’s Daewoo Engineering & Construction to rehabilitate the Kaduna Refinery, reported Bloomberg News.
Under the quick-fix repair contract, the South Korean firm will be responsible for restoring production at the 110,000 barrels-a-day facility to at least 60% of its capacity by the end of 2024.
Located in the northern city of Kaduna, the refinery is currently inoperative. It was commissioned in 1980.
The deal forms part of NNPC’s plan to help Nigeria reduce its near total dependence on fuel imports.
NNPC currently imports the entirety of the gasoline requirements of Nigeria. This is done mainly via crude-for-fuel swaps with local and international traders.
NNPC is planning to use a mix of its own revenue and third-party financing to fund Daewoo’s ‘quick-fix’ turnaround work at the Kaduna refinery.
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The contract follows a Memorandum of Understanding (MOU) signed by NNPC with Daewoo in October 2022 to rehabilitate the Kaduna Refinery.
Daewoo Group was selected by NNPC to rehabilitate the Warri refinery, which is operated by the Warri Refining & Petrochemical Company (WRPC).
In August 2021, the Nigerian Federal Executive Council (FEC) approved $1.4bn for the rehabilitation of the Warri and Kaduna refineries.
Last year, NNPC and its partner TotalEnergies started production from the Ikike field, located in production licence 99 (OML 99), in Nigeria.
The field is expected to have a peak production capacity of 50,000 barrels of oil equivalent per day (boepd).
TotalEnergies operates the OML99 licence with a 40% stake while the remaining stake is held by NNPC.