Ageing equipment and failure to undertake three consecutive turnaround maintenance since 2011 are taking a heavy toll on the operations of the Tema Oil Refinery (TOR) as the refinery has broken down again due to mechanical fault, which has put it out of operation for over a month now.

The refinery developed a fault and has been shut down since June 8, 2016.

Engineers of TOR and maintenance crew are working round the clock to fix the equipment for operations to resume.

Reliable sources told The Finder that the Residue Fluid Catalytic Cracker (RFCC) went down on June 8, 2016.

Consequently, the sources said, the refinery was shut down because engineers observed some leakage in the Flue Gas Steam Generator (FGSG) of the refinery.

According to the information, the inlet expansion joint was also leaking with flue gas.

The sources explained that the leakage was quite hazardous to personnel and equipment, informing the decision to shut down the refinery.

The information gathered indicates that RFCC’s utilisation capacity, which is still around 60-65%, might go down further.

The sources explained that after repairs, the Crude Distillation Unit (CDU) would continue operating at 28,000 Barrels Per Day (bpd) instead of 45,000 because one furnace has broken down.

Engineers say the regular shut down of the machines at the facility was having a heavy financial toll on the refinery.

They explained that after every two years, the whole equipment is shut down and every unit is opened to assess its state, and because that has not been done for the past six years, it is really affecting the plant.

The refinery deals with very high temperature equipment and very corrosive chemicals, hence a shutdown causes thermal shock to the equipment.

TOR is expecting to take delivery of crude on July 30, 2016 despite the shutdown of the refinery.

3 Million barrels of crude processed this year

This year, TOR has processed three million barrels of crude oil before it was shut down on June 8, 2016.

The new furnace is yet to be fixed, and when this is done, it would increase the capacity utilisation to 45,000bpd.

With 45,000 barrels per day capacity, TOR should be able to refine over 16 million (16,425,000) barrels of crude oil annually.

With the current reduced capacity of 28,000 barrels per day, due to one broken down furnace, the refinery should be able to refine over 10 million (10,220,000)  barrels per annum.

3 Turnaround maintenance missed

By design, the refinery is expected to run continuously for a maximum of two years before it is shut down for a major maintenance of its equipment.

The last time a general shutdown turnaround maintenance was carried out was in 2009.

The general shutdown turnaround maintenance for 2011, 2013 and 2015 were not carried out because of lack of cash.

The sources said plans are far advanced to carry out general shutdown turnaround maintenance before the end of this year.

$67.7m Turnaround maintenance

In 2010, TOR requested for $67.7 million for plant stabilisation and enhancement projects.

In response, government in 2012 released $30 million, which was used to complete the first phase of plant stabilisation and enhancement projects on the crude distillation and residual fluid catalytic cracking units.

TOR has completed the first phase of plant stabilisation and enhancement projects on the crude distillation and residual fluid catalytic cracking units at a cost of $30 million.

A second phase of stabilisation and enhancement projects designed to ensure the reliability of operations at the refinery is yet to be carried out.

The Finder understands that additional releases have been made to TOR in subsequent years, and as of now, government has released over $50m out of the $67.7 million requested to TOR.

Inconsistencies in operations from 2009

TOR’s operations were stalled from 2009 to 2014 due to its operational inefficiency and the inability of the facility to establish letters of credit for purchase of crude oil.

It resumed operations on December 29, 2014, only to break down on March 13, 2015.

TOR loses $350,000 daily

TOR loses $350,000 each day the refinery’s processing plants do not operate.

The refinery, which broke down again on March 13, 2015 after it bounced back in December 2014, makes $350,000 daily when it operates at full capacity.

TOR is in excess of over GH₵2 billion

Government, on the strength of social considerations, instructed TOR not to sell into the distribution chain at the prevailing market rate but to assume a level of government subvention.

However, government failed to pay TOR for the subsidies.

This decision, coupled with mismanagement, plunged TOR into debt in excess of GH₵2 billion.

TOR’s capacity to be extended to 60,000 bpd

Recently, President Mahama announced that TOR would be revamped to a maximum capacity of 60,000, including refurbishing its storage tanks and expanding the amount of petroleum products TOR produces and stores.

He pledged that government will assist TOR to grow its capital base and refinance its debt over a period of time.

He made this comment in response to news that TOR posted a profit of $800,000 since it resumed operations in February.

Products of TOR

When it opened in 1963, TOR symbolised pride and hope for Ghana.

TOR refines crude to produce gasoline, cracked fuel oil, liquefied petroleum gas (LPG), aviation turbine kerosene, gas oil, naphtha and atmospheric residue.

TOR is a strategic asset in terms of its total assets and employment generation.

It also contributes to the financial and insurance sectors, security of the petroleum sector, as well as supports suppliers, industries and builds linkages with academia.

Source: The Finder