- Sanjiang into petrochemicals
- Xinganchen focuses on industrial park mngt.
- After squandering $25bn in failed refinery overhauls
Nigeria government and its national oil company NNPC Ltd’s new refinery rehabilitation deal with two Chinese private firms which are not technically into refinery rehabilitation, has fuelled more failure concerns amongst industry analysts and energy experts.
After more than three decades of failed and costly attempts to revamp the country’s aging refineries, with combined nameplate refining capacity of 435,000 bpd, Nigeria’s NNPCL unadvisedly signed a new agreement with the Chinese firms to revive moribund Port Harcourt and Warri refineries. Port Harcourt (old and new) has 210,000 bpd, and Warri’s 125,000 bpd.
According to estimates by energy industry watchers, Nigeria has spent more than N11 trillion (about $25 billion) between 2010 and 2023 on refinery rehabilitation projects, yet these facilities (PHRC and WPRC) have remained largely generated losses.
The Port Harcourt refinery, with its last turnaround maintenance (TAM) in 2000, briefly restarted in late 2024 but was shut down again by May 2025 due to performance issues, after a $1.5 billion curious rehabilitation cost by the ruinous Muhammadu Buhari administration. The Warri facility was never touched by the late former president’s administration for eight years, keeping it comatose.
To wit, Sanjiang Chemical Company Limited is a petrochemical firm primarily focused on ethylene oxide, ethylene glycol and surfactants rather than crude refining.
While Xingcheng (Fuzhou) Industrial Park is focused on industrial park management, investment facilitation and infrastructure development.
Curiouser still, these two firms are private entities rather than the major Chinese state-owned engineering firms with specialized refinery rehabilitation experience.
The Nigeria Employers’ Consultative Association (NECA) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have since called for transparency or outright privatisation of PHRC and WPRC, arguing that for over three decades, federal government-led turnaround maintenance of both oil refining facilities have failed woefully to stop fuel scarcity and it’s attendant petroleum agony in Nigeria.
Weeks back the NNPCL signed a Memorandum of Understanding (MoU) with Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd for the completion, operation and maintenance of the Port Harcourt (210,000 bpd) and Warri (125,000 bpd) refineries under a technical equity partnership (TEP) model.
The TEP model, collaborative business model, ensures that partners (contractor and client) share technical expertise and financial risk. The partner provides both specialized technical expertise and equity capital to a project or company, rather than just acting as a contractor or pure financier. The TEP model is frequently used in large-scale industrial projects such as oil refinery rehabilitations or mining operations to ensure the partner has “skin in the game” regarding both the operational success and the financial performance of the venture.
However, industry analysts and energy experts in Nigeria have raised significant concerns regarding the technical expertise of Sanjian Chemical Company and Xinganchen (Fuzhou) Industrial Park, selected by the NNPC for rehabilitating the Port Harcourt and Warri refineries, pointing out that neither has a known track record in large-scale refinery rehabilitation.
Critics further question the technical expertise of these Chinese partners, whereas Nigeria has increasingly relied on Dangote Refinery, whose 650,000-bpd facility has provided sort of a wedge, and turned the country into a net fuel exporter despite ongoing crude supply shortages.
