The Nation Newspaper

Category: Energy

  • ‘5,000 vehicles in Nigeria run on CNG’

    The Nigerian Independent Petroleum Company (NIPCO) Plc, an indigenous downstream petroleum and gas operator, has said over 5,000 vehicles run on compressed natural gas (CNG) in Nigeria.

    The company said the CNG- powered vehicles had come to stay in Nigeria, since the inception of the project in 2009.

    NIPCO’s Head of Public Affairs, Mr. Taofeek Lawal, said more than 4,000 vehicles had converted to use CNG in Benin, the Edo State capital.

    He said over 500 vehicles were also operating in Lagos on the environment friendly CNG. According to him, the aim of the CNG refilling stations in Nigeria, especially in Lagos, was to provide alternative to Premium Motor Spirit (PMS) at a reduced cost and to boost national socio-economic growth.

    He also said aside the economic gains, CNG targeted reduction of unfriendly automobile emissions and exposure of Nigerians to the innovation of powering vehicles on gas, adding that the company has about 10 CNG operating stations nationwide, while others are under construction.

    He said the patronage of CNG refilling station, at Ibafo, Ogun, has been impressive with an average of five minutes’ drive by commercial buses and private vehicle owners. “CNG sustainability in Nigeria is sustainable considering that Nigeria is one of the largest producers of natural gas.

    “Ibafo CNG station, near Lagos, is a world-class facility with about 12 dispensing pumps for light and heavy duty trucks. The innovation is sustainable because the private sector is taking the lead, as government provides enabling environment for it to thrive,” he said.

    Lawal said the conversion of vehicles to CNG compatible costs between N200,000 and N300,000. He said the cost profile of CNG vehicular conversion came with a flexible repayment package and depends on the choice of kit.

    He also identified poor awareness, absence of policy on natural gas vehicles and lack of natural gas supply across the country as the cause of poor usage of CNG as fuel for vehicles.

    Lawal said stagnation of CNG revolution in Nigeria was also due to the inability of NIPCO and the Nigerian Gas Company to float a Joint Venture (JV).

    He noted that lack of gas infrastructure, pricing and the government support militate against CNG expansion in Lagos.

    “Nigerians are well informed towards the CNG projects but it can be improved upon. The best time for CNG popularisation is when government increases the price of PMS. This will further compel motorists to think of the cost benefits of powering vehicles with natural gas. Gas at N55 per standard cubic feet is equivalent to one litre of petrol, which currently sells at N87 with government subsidy. All the necessary approval from DPR has been obtained before commencement of operation,” he said.

    The company’s officials at the Ibafo CNG refilling station said motorists pay initial deposits of about N20,000 for conversion to gas while the balance is deducted through subsequent purchase of gas.

  • NCDMB, NUC to link oil industry with universities

    The Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Universities Commission (NUC) are partnering to link the oil and gas industry with the university curricula so that both sectors can improve their operations for the benefit of the economy.

    The management of the two agencies agreed to this initiative tagged: Adopt A Faculty (AAFac) programme at a meeting in Abuja and set up a joint committee to develop a detailed action plan within four weeks.

    The Executive Secretary,NCDMB, Mr. Denzil Kentebe, described the AAFac Programme as a capacity development initiative of the Board intended to use academic institutions as a catalyst for local content development.

    He said the programme is aimed at facilitating partnerships between the academia and the oil and gas industry to align the university curriculum to industry technology and skill requirements to enable them train their students in courses and programmes relevant to the needs of the industry.

    He listed other goals of the programme to include developing a culture for applied research, stimulating commercialisation of research findings from academic institutions, encouraging beneficiaries of oil and gas resources to invest in manpower and innovation and maintaining healthy pipeline of oil and gas talents.

    Kentebe confirmed that the Board would use its regulatory powers and mandate to ensure that oil and gas operating and service companies comply with the AAFac programme.

    The Executive Secretary of the NUC, Prof Julius Okojie, praised the Board for initiating the programme and engaging the commission first rather than going to various institutions.

    He said Nigeria has 142 universities with 610 academic programme, assuring the commitment of NUC to partner with NCDMB in the implementation of the AAFac.

    The NUC boss decried the rejection of various students by operators in the industry due to perceived lack of relevant skills and expressed hope that the initiative will address the trend.

    Okojie, who was represented by the Deputy Executive Secretary 1, Prof. Chiedu Mafiana, said the first step in the AAFac programme, would be to review the curriculum, identify the gaps both in theory and practical and restructuring the curriculum to meet the needs of the oil and gas industry.

    The deal identified the inclusion of effective monitoring and evaluation mechanisms into the action plan as imperative to ensure the success of the programme.

    They regretted that most operators of the oil and gas industry had carried out intensive research and development in their home countries over the years and expressed hope that the AAFac programme will reverse the trend in favour of universities.

  • Neconde’s July production hits 24,000 bpd

    Production from oil mining lease (OML) 42 operated Neconde Energy Limited, an indigenous oil and gas firm, has grown to 24,000 barrels per day (bpd) in July from 14,194 bpd in June.

    The oil asset situated at the Niger Delta basin is a joint venture owned by Neconde and Nigerian Petroleum Development Company (NPDC), the exploration and production arm of the Nigerian National Petroleum Corporation (NNPC).

    OML 42 is one of the oil blocks divested by Shell Petroleum Development Company Limited (SPDC) Joint venture.

    The July production is a record output from the asset. The highest production on the acreage before July was in February 2015, when the output averaged 19, 700BOPD. Neconde took over the operatorship of the acreage in May.

  • GE refurbishes subsea ‘Christmas trees’ for growth

    General Electric (GE) has embarked on the refurbishment of its Subsea Christmas Trees,  to boost its operation.

    Subsea Christmas tree is an assembly of valves, spools, and fittings used for oil, gas wells, water injection well, condensate well, among others, in the oil and gas industry.

    Basically, the tree is used for petroleum and natural gas extraction, and its refurbishment by GE will reposition the firm for increased operation.

    The Chief Operating Officer, General Electric, West Africa, Uzochi Nwagwu, said the trees were being refurbished in line with his company’s growth plans of winning more customers by leveraging on opportunities in the industry.

    He said domestic and international oil firms would from time to time, explore for oil in the industry, adding that GE is preparing itself to meet their needs.

    According to him, GE offers services to Exxon Mobil, Agip, Shell Nigeria Exploration and Production Company (SNEPCo) and others, adding that the refurbishment would help GE win the operators’ confidence at both the on-shore and off-shore segments of the oil and gas sector.

    The operators, he said,  are happy with GE’s decision  to refurbish Subsea Christmas trees, adding that the development will impact positively on the operation of the company.

    The trees’ lifespan, according tohim, is between 15 and 20 years, noting that some components of the trees age at some point and need to be removed and replaced to meet the yearnings of oil and gas exploration companies.

    He said: “GE selected a number of its trees for refurbishment because they are incapable of meeting the growing needs of existing and prospective operators. At our (General Electric) facility at  Onne, Rivers State, what we do now is that we  select old trees, remove worn out parts and reshape them to perform optimally.

    “This idea is necessary in order to keep in tune with developments in the global oil and gas industry. As the industry keeps growing, pressure keeps on piling up for operators, who in their own estimation, desire quality services to survive in the industry. By refurbishing the trees, GE is expanding the life cycle of the trees, while at the same, trying to get a sizeable chunk of the oil and gas market. A lot of activities are coming up in offshore and deep offshore, and GE, like any other companies, would like to take advantage of that for growth.”

    Nwagwu, who oversees GE’s oil and gas department, said the refurbished trees were in Bonga field, where the company offers services to Shell.

    He said the cost of refurbishing Subsea Christmas trees varies because they have different problems. According to him, the company would be manufacturing components of Subsea Christmas tree in its facility in Calabar, Cross River State soon.

    The development, Nwagwu said, would afford the company of opportunities of owning  more trees, get more customers and grow its revenue.

  • Lagos restates commitment to mining standards

    •Govt warns illegal sand miners

    The Lagos State Government has restated its commitment to  international standards in sand mining in the state.

    The Director, Human Resources and Administration, Mr. Fashola Adeyemi Taofik, said this during an assessment of some sand mining sites inAjah/Lekki.

    He said the Ministry will ensure that miners operate according to regulations to boost sustainable development in the state.

    In a statement, the Public Relations Officer of the Ministry, Olaoye Olusegun, Taofik noted that to obtain the mining standard, the Ministry monitors sand miners and ensure that rules are followed.

    He said: “In furtherance of the Ministry’s mandate to ensuring a sustainable mining operation, constant monitoring and  clinical review of mining methods and its impacts, taking stock of degraded area as well as putting in place a restoration plan is being done by the Ministry.

    “The objectives of the mining site monitoring and evaluation was also to locate and delineate the extent of land degradation at mining sites, initiate and develop land use programme for the identified area, for example, fish farming, agricultural cultivation, coconut plantation, and landscaping. It is also meant to identify the derivable impact of the exercise on affected communities as well as develop mining methods and proper documentation that will ensure sustainable development.”

    He said henceforth the state government would not take it lightly with those involved in illegal sand mining as they constitute the majority of those who degrade the environment.

  • NAPE seeks removal of minister as NNPC’s board chair

    NAPE seeks removal of minister as NNPC’s board chair

    •Industry turnaround proposal sent to Buhari

    The Nigerian Association of Petroleum Explorationists (NAPE) has asked the Federal Government to stop the  appointment of Minister of Petroleum as the statutory chairman of board of directors of the Nigerian National Petroleum Corporation (NNPC).

    The demand forms part of the group’s recommendations in a communiqué it sent to the government after its special workshop, held about two months ago.

    The communiqué, The Nation learnt, was sent to President Muhammadu Buhari  and Vice President Yemi Osinbajo and had already met with the group on issues raised.

    Its President, Dr. Chikwendu Edoziem, confirmed to reporters in Lagos that  members had a meeting with Prof Osinbajo, but didn’t dsiclose what they discussed.

    The communiqué has 14 recommendations including provision of an enabling environment and incentives to increase exploration opportunities, especially in high-risk frontier basins and under-explored deep high pressure high temperature (HPHT), reduction of contracting cycles for services and projects to a maximum of three months and nine months respectively. They added that the lowest bidder concept is being abused through ridiculously low bids.

    The association proposed that low to medium cost technical services bids outside operator estimated cost ranges be disqualified.

    NAPE pledged to sustain engagement and mutual support between oil and gas producing companies and host communities, and recommended that the Petroleum Industry Bill (PIB), as it is, be unbundled and that the relevant sections of the extant Petroleum Act be amended to meet current realities, and position Nigeria to be globally competitive as an oil and gas producing country.

    It stated that the full potential of the Department of Petroleum Resources (DPR) would better be realised if it is empowered as an independent oil and gas industry regulator.

    The association wanted DPR renamed as ‘Petroleum Directorate’ to reflect the proposed changes, increased role and overarching autonomy.

    Other recommendations include restructuring and devolution of NNPC, with a spin-off upstream company that is commercially viable semi-public Nigerian oil and gas company with world-class capacity for hydrocarbon exploration, development and production. This according to them, will allow for effective, purposeful and business-focused decision making.

    The association also said participation in, and transparency of future bid rounds  would be improved by simplifying the guidelines, increasing the frequency of the licensing rounds, and reducing the sizes of the acreages on offer. It added  that modular and micro refineries be built in the ‘Niger Delta Economic Corridor’, pooling the burgeoning illegal and unsafe refinery operators.

    It suggested that the government adopts a strategy of standardised design, streamlined and cumbersome-free approval process, to ensure an efficient turn-around time for construction to full operation of one year.

    “Government should accelerate the funding and completion of the new gas projects in the western axis of the Niger Delta to immediately add about 2,000 million standard cubic feet per day (MMscf/d) of gas production. NAPE supports that stranded associated gas that is flared be utilised for power generation via accelerated approvals for captive power plants while targeting top flaring sites,” the association said.

  • Sahara Power eyes 10,000Mw generation

    Sahara Power eyes 10,000Mw generation

    The Sahara Power Group, a conglomerate in Nigeria’s power sector, said it is working towards generating 10,000megawatts of electricity (Mw) in Africa within the next one decade.

    It promised to achieve it through a combination of expansion projects, offshore acquisitions and investment in renewable energy.

    The Group comprises Egbin Power Plc, Ikeja Electric and First Independent Power Limited.

    Its Managing Director, Kola Adesina, who spoke at the fourth graduation of the graduate skills development programme of the National Power Training Institute of Nigeria (NAPTIN), which held in Lagos, said the organisation was hopeful that the 10,000Mw target would be achieved, given “a stable regulatory environment, resolution of all the complexities in the sector and capacity to utilise the increased generation”.

    He said the target was in line with the organisation’s commitment to tackle the power conundrum with a new approach that is being driven by impeccable work ethics in the Group’s entities.

    “Sahara Power Group companies are operating under a new paradigm shift that has seen a resurgence of the values of good governance, integrity, discipline and expertise. The legacy and new staff have embraced this new approach to work, often going the extra mile to learn and do more in the pursuit of creating value. This is a development that has played a key role in the recent increase in power supply across the nation,” he said.

    He continued: “We are  generating about 1,200Mw in Egbin Power Plc, which is responsible for one quarter of total power generation in Nigeria. We are ramping up capacity in Port Harcourt and would also explore opportunities for possible acquisition of power generation assets outside Nigeria. Our main focus for now is Nigeria, where we are laying the foundation for a major transformation in the sector in partnership with KEPCO, the globally renowned power group.”

    Permanent Secretary, Federal Ministry of Power, Ambassador Godknows Igali, said power generation had been on the increase in the last three months largely due to improvements in gas supply and repositioning of the generating plants by their new owners.

    “Organisations like Sahara Power clearly tell the story of how important and effective the privatisation in the power sector has been. We recently hit a generation peak of 4,800Mw and the trend is looking good. We are working at ensuring that all the loose ends in the sector are addressed to enable Nigeria experience accelerated socio-economic development that can only be driven by uninterrupted and widespread power supply,” Igali said.

    NAPTIN’s Director-General, Rueben Okeke said the institute had concluded plans to enhance the status and depth of its programmes through a partnership with the University of Lagos.

    Sahara Power sponsored its 100 graduate engineers to the NAPTIN training programme.

    Adesina said the young engineers would form the bedrock of power experts that will extend the frontiers of knowledge in the entire sector to “help improve the quality, cost, effectiveness and sustainability of power supply in the sector”.

  • TCN eyes 30 projects to boost wheeling

    As the power generation improves and expected to continue to increase, the Transmission Company of Nigeria (TCN) has marked out 30 critical projects to expand its wheeling capacity to 8,000 megawatts (Mw) from 5,300Mw.

    Its Managing Director , Dr. Abubakar Rasheed Tambuwal,  told The Nation that TCN has over 130 projects ongoing but chose 30  to equip the transmission network for more generation.

    He said: “We have over 130 ongoing projects from 2002 but some of them were stalled due to lack of fund. Out of those we have identified about 30 which are critical for us to be able to reach the evacuation capacity that we need over next coming years. These are the projects that we have articulated for immediate funding. We are still working with the government. We are putting in our request, so that these critical projects are properly funded.

    “We are not waiting for investors because that will take time for them to come and fund the projects. We are looking inwards from whatever source to be able to get enough money, which I said is a minimum of N15 billion in a year to be able to get the few selected critical projects to proceed to where we would be able to wheel the power to customers.”

    He also noted that the National Integrated Power Project (NIPP) has done some transmission projects, commissioned and handed  over to TCN.

    “NIPP is also responsible for generation, transmission and distribution. On the transmission aspect, they execute those projects, commission and hand over to us. We have a way of paying back. We have not started paying back but it is a project that is being funded by the three tiers of the government, we are looking at ways of getting them paid back.

    “But we are working in good harmony with them. All the projects they have been executing in transmission, we are taking over and we are running them,” he said.

    Abubakar said privatisation of TCN  might be in the long-term. “Privatising the TCN, I think, will be in the long term. But TCN is being managed by contractors, Manitoba Hydro International. They have just been renewed one year after the previous contract time elapsed. It is expected that by the time they finish their tenure, the company will be able to be in a status that can be concessioned, that is part of the contract deliverable of Manitoba.

    “So, the company should be able to be concessioned by the government but not outright sale. But decision by the government in the future could involve privatisation but that is not on the table yet. As far as improved generation is concerned, that is why I said we have identified these projects that will make us be capable of transmitting whatever energy that is generated,” he added.

    Abubakar said funding to TCN has not improved considering the fact that a lot of projects are in the pipeline, which need to be bonded and because of the present situation, there is need for additional funding from what we used to have. “We are making all efforts to ensure that we bring funds outside appropriation of government. We have investors who are ready to come in and participate in our investor financing scheme. The scheme is still at its preliminary stage but as soon as we finalise it, we will have investors who are willing to put in their funds to develop our transmission infrastructure. We also expect more funding from the Federal Government to be able to achieve the mandate we have set for ourselves to improve on the transmission capacity,” he said.

    He said the additional funding from the government was vital because generation has improved due to improved gas supply.

  • Shell: Insecurity, others inhibiting gas flare out

    Shell: Insecurity, others inhibiting gas flare out

    Insecurity, inadequate funding and lack of commitment from joint venture (JV) partners stalling the plan to end gas flaring in Nigeria, Shell Petroleum Development Company Limited (SPDC) has said.

    The firm in its latest journal, Shell in Nigeria, stated that since 2000, it has worked with the Federal Government to end the flaring of associated gas but that security and funding, among others, have been hindering that goal. To acheive this goal, the problems must be addressed, it added.

    Shell said: “Further progress in ending continuous gas flaring will be heavily dependent on the security situation. Sustained commitment from all JV partners is also crucial. Funding challenges have resulted in delays to tow major associated gas gathering projects that were expected to deliver an additional 35 per cent reduction in flared gas by 2014-15.”

    It said in many oil fields, gas is produced with crude oil when it is brought to the surface. It recalled that  SPDC’s first production in the 1950s and 1960s, had little demand or market for associated gas. Consequently, the majority of it was burned off – a process called flaring. But in recent years, demand for gas in Nigeria and other countries has grown while the technology to harness, liquefy and export gas has come of age.

    It  however, said since 2000, all new Shell JV facilities have been designed to include no continuous flaring of associated gas. It noted that in parallel, a multi-year programme was implemented to install equipment for capturing associated gas from older facilities. As a result, flaring volume from its JV facilities was reduced by 75 per cent between 2002 and 2013 and flaring intensity by about 60 per cent over the same period, but due to increase in production last year, volume and intensity of flared gas increased, it stated.

    “Increased levels of oil production in 2014, combined with delays to new projects coming on stream, meant that volumes of flared gas increased by 12 per cent over the year and flaring intensity by nine per cent. The increased frequency of pipeline sabotage over the last two years has resulted in numerous unplanned production shutdowns. These in turn have impacted the performance of gas processing systems, which operate more efficiently with uninterrupted production, and has constrained our progress on reducing flaring intensity,” it added.

    Shell said despite the challenges, the overall trend in flares reduction is positive and it continues to invest in major gas gathering projects that will drive further reduction.

    The company noted that it monitored ambient air quality levels around its flare sites since 1998 and regularly reports the results to government authorities, as required by Nigerian regulation.

    “SPDC monitoring data shows that air quality around our flare sites complies with these standards barring occasional operational issues (such as when gas needs to be flared for safety reasons). These standards are equivalent to international air quality standards followed in the European Union, United States and those set by the World Health Organisation (WHO).

    “SPDC recognises the importance of addressing local communities’ perceptions and concerns about flaring, in addition to complying with regulations. For this reason, consultation with community and civil society representatives is an integral part of the environmental impact assessments (EIAs) conducted for all major projects,” it added.

  • Oil workers advise Buhari to prioritise gas

    Oil workers advise Buhari to prioritise gas

    The Federal Government should make gas development its major source of earnings in view of the current global slump in oil price, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has said.

    The body in a document signed by Comrades Francis Johnson and Bayo  Olowoshile, President and General Secretary respectively, said it was high time the country diversified its economy by giving more attention to gas exploration and exportation for growth.

    It said Nigeria’s proven gas reserves of 183 trillion cubic feet (tcf) is huge and capable of bringing enormous revenue to the  government if well harnessed.

    The document said gas flared annually is estimated at 31.5 billion cubic metres (bcm) about 1.1 trillion cubic feet (tcf) valued $2.5billion is also a huge loss, adding that the waste can be prevented if the right policies are in place.

    “With 172million estimated population and our vast growing but grossly under exploited gas markets, the global campaign for the promotion of more environment friendly energy, emphasis on the activities of gas will preserve our forest, and generate more revenues for the country. Based on this, the government of President Muhammadu Buhari will be recording a far more success in the area of improving fiscal resources for the growth of the economy,” it said.

    The workers explained that the depletion of Nigeria’s foreign reserves and failure of the  government to meet budgetary expectations in recent times, was because the country depends solely on oil.

    According to the body, there is the need for a paradigm shift from oil to gas to grow the economy well, stressing that billions of dollars that Nigeria lose from oil was not good enough.

    PricewaterhouseCoopers estimates that Nigeria lost $5billon within five months this year, following the problems in the global industry. Also, the Oil Producers Trade Section (OPTS) of Lagos Chamber of Commerce and Industry (LCCI) estimated that Nigeria’s revenue  from oil could be cut by about $10billion or 30 per cent before December, if urgent steps are not taken to address problems in the oil and gas sector.

    Its Vice Chairperson and Managing Director, Total Upstream Companies in Nigeria, Elizabeth Proust, warned that low crude oil prices  have significantly reduced the level of investible funds at a time when competition for investment is sharpening.