The Nigeria National Petroleum Corporation (NNPC) has warned that the country’s pipeline networks are completely compromised. This was made known by the Group Managing Director (GMD) of the Corporation Mallam Meles Kyari who blamed this on activities of vandals and lack of investments. Kyari spoke at the bidding opening for the rehabilitation of the downstream critical pipelines and associated depots/terminal infrastructure in Abuja.
According to him, because of a lack of investment over a long period of time, the assets have deteriorated. “Our pipeline network is completely compromised. For two things the first is age. We have not invested in these assets for a very long period of time and they have deteriorated over the period of time as a result of age and natural integrity loss,” he said.
Kyari also stated that the incidence of vandalism was a contributing factor as activities of vandals have further affected the functionality of the pipelines.
He said: “There are several actions of vandals across our pipeline networks, forcing us to practically stop the maintenance because they could no longer deliver the product that we want because their integrity was compromised. They could no longer take the pressure required to deliver the huge volumes of crude oil on these pipelines.”
However, Kyari said the bidding process is to call for private investments in the rehabilitation of the pipelines. He explained that the investors will finance, build, operate and transfer the assets while also noting that they would require their cost from the tariff that would be paid from using the pipelines.
“Some of these assets are as old as forty years (40) years and they are due for replacement and when you want to do a replacement of this scale, you do need a lot of resources. And we know that we require these assets so we decided that we bring in private partners who will fund these pipelines, they will construct it, they will operate it with us and then 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,” Kyari noted.
The GMD stated that the exercise was in fulfilment of NNPC’s avowed commitment to transparency and accountability as an Extractive Industries Transparency Initiative (EITI) partner company and as directed by President Muhammadu Buhari that all its operations must be guided by integrity.
“This is not possible to achieve if we do not have the leadership disposition that is in support of transparency. I can confirm to all of you that it is the clear directive of Mr President that this company must be accountable and must be transparent to its shareholders. We must take all necessary steps to make sure that our transactions are known to the citizens of this country, that we do things for the common good of all of us and that in doing our business, we must ensure integrity,” he stated.
Kyari said the final partners of the bid opening would be selected by the end of 2021, first quarter. Earlier, the Chief Operating Officer, Downstream, Ms Lawrencia Ndupu, who was represented by the Managing Director, Petroleum Products Marketing Company, Musa Lawan, said the Nigerian Pipelines and Storage Company (NPSC) operates 5,120 length of pipelines which traverses the entire country with two coastal depots in Lagos and Calabar.
On her part, the General Manager, Supply Chain Management (SCM), NNPC, Mrs Sophia Mbakwe, said at the end of the submission of virtual bids, 78 companies submitted bids for the pre-qualification of rehabilitation of NNPC downstream critical pipelines, associated depots and terminal infrastructure.
Other external observers who witnessed the exercise were the Bureau of Public Procurement, the Nigeria Extractive Industries Transparency Initiative (NEITI), Civil Liberty Organisation and the Centre for Transparency Watch.
In another development, the Director-General (DG) Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwah, has commended the leadership of the Nigerian National Petroleum Corporation (NNPC) for totally driving a transparent bid opening processes for the rehabilitation of NNPC pipelines and its critical downstream infrastructure
A statement issued by the Group General Manager, Group Public Affairs Division, Dr Kennie Obateru, quoted Izuwah as saying that the novel NNPC virtual public bid-opening exercise was in line with the ICRC infrastructure revolution drive.
“You showed to the world that you’re driving a totally transparent Public Private Partnership process in line with the infrastructure revolution of President Muhammadu Buhari. Today’s public bid opening for the rehabilitation of NNPC pipelines, depots/terminal infrastructure is quite commendable.
“I commend the GMD Mallam Mele Kyari, his team and the NNPC Group for showing to the world that things can be done properly and in the best interest of the shareholders,” Izuwah stated.