The Tema Oil Refinery (TOR) has shut down its Crude Distillation Unit (CDU) plant following its inability to establish letters of credit (LCs) from its bakers to purchase crude oil for production.
This follows an earlier shut down of the Residual Fluid Catalytic Cracker (RFCC) on June 30, this year. A highly placed source at the refinery told the Daily Graphic that the CDU plant was shut down about 11:50 a.m. last Monday, moments after workers had finished processing the remaining quantity of crude oil belonging to the Ghana National Petroleum Corporation (GNPC) under tolling arrangement between the two institutions.
The management of the refinery has, for the past three weeks, been struggling to establish LCs from some $54 million to take delivery of consignment of 600,00 barrels of crude ordered from Nigeria through an open market arrangement.
The chartered vessel carrying the crude, the Nippon Princess owned by Chakos Shipping Line, is still on dock at the Tema Port awaiting the successful establishment of the LCs to enable it to dock at the single point mooring (SPM) facility for onward delivery.
Indications are that since no single bank can raise the amount, there was the need for three banks to come together to raise the amount to enable TOR to take delivery of the crude oil.
Similarly, a single LC service charge, the Daily Graphic learnt, attracted a 0.7 per cent interest, for which reason TOR would be prompted to pay some 2.2 per cent charge in the event of three institutions forming a consortium.
The source also stated that TOR was yet to retire a previous 90-day LC raised by a consortium of financial institutions for April and May crude deliveries. That, it said, was a major reason hindering the TOR management�s efforts at raising further LCs for the delivery of the consignment.
Source: Daily Graphic
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