The Nigerian National Petroleum Company Limited is considering an NLNG-style equity partnership that could hand Chinese investors a majority stake of about 51 per cent in the Port Harcourt and Warri refineries as part of a broader plan to rehabilitate and commercially reposition the facilities.

Details of the arrangement emerged after NNPC signed a Memorandum of Understanding with Chinese firms Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park Operation and Management Co., Ltd. for what the national oil company described as a “potential technical equity partnership”.

The MoU was signed in Jiaxing City, China, on April 30, 2026, by the Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari; Chairman of Sanjiang Chemical Company, Guan Jianzhong; and Chairman of Xinganchen Industrial Park Operation and Management Co. Ltd, Bill Bi.

Findings by The PUNCH on Thursday showed that the proposed framework goes beyond conventional refinery rehabilitation contracts and may involve long-term equity participation by the Chinese partners in both refining assets.

Sources at the national oil firm privy to the MoU told our correspondent that the proposed partnership is being structured around an “NLNG-type model” featuring equity participation, joint governance arrangements, and long-term operational involvement.

They disclosed that the structure may be similar to NLNG’s, where investors own 51 per cent equity, participate in governance, and share operational responsibilities over the long term. Under the proposed collaboration, the Chinese firms are expected to support the completion of outstanding work at the Port Harcourt and Warri refineries.

The agreement also covers operations and maintenance services aimed at achieving what NNPC described as “best-in-class, sustainable performance”. According to findings, the planned upgrades would also expand refinery capacity, improve profitability, and raise fuel production standards to cleaner specifications.

The parties are equally exploring expansion into petrochemicals and gas-based industrial projects through the development of co-located industrial hubs around the refinery complexes.

“The scope includes capacity expansion, yield optimisation, petrochemical integration, and compliance with clean fuel standards and exploration of gas-based industrial projects in Nigeria,” an NNPC official said, pleading anonymity because he was not authorised to speak to the press.

Speaking after the signing ceremony, Ojulari described the agreement as a major milestone after more than six months of engagement between NNPC and the Chinese firms. “All parties recognise mutually beneficial opportunities for the development and long-term sustainable profitability of NNPC’s refining assets in Nigeria and the collective weight required for success,” he said.

Ojulari added that the agreement marked an important stage in identifying technical equity partners capable of restarting and expanding the refineries. “The MoU is a significant step on the journey towards identifying potential technical equity partner(s) to restart and expand NNPC’s refineries and to explore opportunities in co-located petrochemical and gas-based industries,” he stated.

Our correspondent gathered that the MoU reflects only the parties’ intention to continue discussions in good faith, with definitive agreements still subject to regulatory and customary approvals.

Further findings showed that the implementation process would begin with technical, operational, financial, commercial, and legal due diligence before binding agreements are executed.

“The agreement is a non-binding framework, meaning it is not yet a final commercial contract. Instead, it establishes a basis for cooperation and creates a pathway toward future definitive agreements. The partnership is expected to cover four major operational areas: Sanjiang/Xinqianchen would participate in completing outstanding engineering, procurement, and construction work at the two facilities. The focus is on improving refinery reliability, safety, and efficiency to ‘best-in-class’ standards.

“Instead of a conventional contractor arrangement, the MoU suggests possible equity participation using an NLNG-type model of joint governance arrangements and a long-term partnership framework. This implies Sanjiang/Xinqianchen may take ownership or operational participation rather than acting solely as an EPC contractor. However, everything is subject to agreement.

“Also, there is a possible transformation of the refineries into commercially driven industrial assets like petrochemical and gas,” the source said.

Analysts said the shift towards an equity partnership structure may signal growing concerns within NNPC over the sustainability of previous refinery rehabilitation arrangements.

Speaking in an interview with our correspondent about the MoU, the Executive Secretary of the Major Energies Marketers Association of Nigeria, Clement Isong, said bringing in technically competent partners with equity stakes would ensure efficiency and sustainability.

On the structure of the deal, Isong stressed that the key difference is that the Chinese partners are taking equity in the assets as part owners and would want the refinery to work so they get returns on their investments.

“This is an innovative way of getting the assets to work in an efficient and sustainable way. The challenge we knew was that NNPC did not have the internal competence or capacity to run those refineries efficiently. Now, they have brought a third party, and the key difference is that the third party they have brought is taking equity. He’s a part-owner of the refinery and so would want the refinery to work so he can get returns on his investment,” Isong said.

He described the model as innovative, adding that every Nigerian would be happy if the facilities worked again. He said the NNPC did not have the internal competence and capacity to run the refineries without a technical partner.

The Port Harcourt refinery rehabilitation project was earlier awarded to Italian engineering firm Maire Tecnimont, while separate rehabilitation efforts had also commenced at the Warri refinery.

The proposed arrangement could also deepen Chinese participation in Nigeria’s downstream petroleum and gas industries if discussions progress into binding commercial agreements.