NIGERIA’S National Petroleum Corporation (NNPC) has revealed that a total of 78 companies have submitted virtual bids to rehabilitate its downstream pipelines and upgrade its decaying infrastructural facilities.
Despite being the world’s sixth largest crude oil exporter with a daily output of about 2.5m barrels, Nigeria’s petroleum industry is suffering from chronic infrastructural decay. Across the supply network, many of the pipelines have not been replaced for decades despite the fact that oil pipelines are supposed to have a lifespan of 10 years.
To address the problem, the NNPC has asked for tenders to carry out repairs on its pipelines, associated depots and terminal infrastructure through a finance, build, operate and transfer model. According to Mele Kyari, the NNPC group managing director, the exercise was in fulfilment of the corporation’s commitment to transparency and accountability as an extractive industries transparency initiative partner company.
He said the finance, build, operate and transfer model became imperative in the corporation’s journey to rehabilitate its downstream infrastructure which over time had become vulnerable, lost value and integrity due to age and incessant vandalism. According to Mr Kyari, some of the assets were as old as 40 years and were due for replacement and to carry out such a replacement of this magnitude, there would be need for resources.
Mr Kyari said: “We know that we require these assets so we decided that we bring in private partners who will fund these pipelines and they will construct-operate them with us. Ultimately they will fully recover their investment from the tariff which we will pay for using these pipelines and as soon as they recover their cost and their margin, they will hand over these assets back to us.”
He added that by the end of the first quarter of 2021, the final partners of the bid opening would be selected. Mr Kyari assured the bidders that the Nipex portal which was deployed for the pre-qualification exercise was a time-tested technology that would not give room for any human indiscretion.
Lawrencia Ndupu, the NNPC’s chief operating officer, downstream, said the Nigerian Pipelines and Storage Company operates 5,120 length of pipelines. She added that the pipelines traverses the entire country with two coastal depots in Lagos and Calabar, pointing out that the public bid opening processes was being done transparently.