The Nation Newspaper

Tag: Gas

  • 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.

     

  • Firm to sell gas to Port Harcourt Disco

    A Nigerian firm, Green Energy International Limited (GEIL), operator of the Otakikpo Marginal Field in River state, has pledged to utilise gas for power generation to its host community.

    GEIL, an oil production firm, just struck its first oil in the Niger Delta.

    Its Technical Director, Dr Bunu Alibe, said the company would sell its excess gas to the Port Harcourt Electricity Distribution Company (PHEDC), an electricity distribution company (Disco).

    A statement yesterday in Abuja by its Corporate Affairs Directorate said: “The Technical Director of the indigenous company, Dr Bunu Alibe, explained …that the strategy consists of oil production from the field while the associated gas will be processed and utilised for power generation for the communities and the excess sold to the Port Harcourt Disco, in addition to LPG extraction and bottling facility to produce and distribute domestic cooking gas.”

    Alibe said the firm recently obtained a licence for 10 Megawatts (MW) captive power from the National Electricity Regulatory Commission (NERC).

    The company, according to the statement, was recently granted a license by the Department of Petroleum Resources (DPR) for Modular Refinery to produce diesel and other refined products.

    It has also pursued a stakeholder partnership model with the communities around the project area, a situation which has enabled the host communities to appreciate the presence of the company as partners for sustainable development.

    The technical Director noted that the company will accelerate its drive to put in place necessary infrastructure and processes to continue full development and eventual production from the field in no distant future.

    Alibe said the company will in the months ahead install the Extended Production Facility (EPF) and construct a five-kilometre submarine pipeline to enable produced crude from the Otakikpo Field to be evacuated via a Shuttle Tanker. He highlighted that work towards the installation of a power plant and other related gas utilization projects has reached advanced stage of actualization.

     

  • 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.

  • Niger Delta Petroleum Resources wins Global Gas Flare Award

    The  Niger Delta Petroleum Resources Limited has been declared the winner of the “Global Gas Flare Reduction Excellence Award.”

    In a statement, the oil and gas industry regulator, Department of Petroleum Resources (DPR), expressed its appreciation on the recognition of the indigenous petroleum firm.

    It said the achievement was more remarkable as the Niger Delta Petroleum Resources Limited prepares to celebrate its 10th anniversary.

    DPR said: “It is a further testimony of Nigeria’s progress in its effort to strengthen indigenous capacity in adhering to international best practices while exploiting our natural resource.

    ‘’We commend the relentless efforts of the management and staff of Niger Delta Petroleum Resources Limited in ensuring gas flare reduction in their Ogbele gas field project, in line with government’s flare down policy, which has led to this global recognition.

    “We rejoice with them and acknowledge their excellent achievements as being the first indigenous company with a fully integrated oil and gas operation across the entire value chain of the Nigerian oil and gas sector.’’

    It continued: “The Department of Petroleum Resources will continue to provide needed support and guidance to all operators in an effort to encourage optimal productivity of their respective assets in line with global standards, as this will ensure a positive economic growth in Nigeria and sustainable development in the sector.’’

    Niger Delta Petroleum Resources  would be conferred with the award by the Global Gas Flaring Reduction Partnership – a World Bank Group –  between September 9 and 10, 2015 in the Russian Federation.

  • Frontier Oil seeks better deal for local gas firms

    The Chief Executive Officer of Frontier Oil Limited, Dada Thomas, has called on the Federal Government to discuss with indigenous gas companies on ways of boosting gas production to meet the nation’s power and other domestic gas needs.

    He made the call in Lagos at the yearly conference of the National Association of Energy Correspondents (NAEC) titled: “Tackling gas supply challenges to arrest power crisis.”

    He said about 182 trillion cubic feet (tcf) of gas is in Nigeria waiting to be developed but that what is required to achieve it, is the political will, enabling policy, commercial and regulatory framework.

    Thomas said the future of gas and gas-to-power in the country is bright and called on the government to grant the kind of incentives it gave International Oil Companies (IOCs) in the past to the indigenous operators who contribute over 53 per cent of local gas production in Nigeria.

    He said: “I strongly believe that the Federal Government should incentivise indigenous operators to undertake domestic gas projects, which will help Nigeria meet its power and other gas related requirements. If the government could give incentives to IOCs in the past, then surely it is only fair and equitable that it also give similar incentives to the indigenous operators.”

    He said the highly successful Nigeria LNG project at Bonny owned by the Shell-led Joint Venture, the Chevron Escravos Gas project and similar projects were all given incentives to ensure these projects came to fruition.

    He condemned the gas prices in Nigeria, saying it is lower than what obtains in other markets around the world. This, according to him, has made the gas business less attractive than the oil business for more than 40 years.

    He said: “For the gas transactions to be based on a willing-buyer, willing-seller driven commercial platform, government should stay away from regulating the commercial transactions between interested parties.”

    He said though the Federal Government increased baseline gas price to the power sector to $3.3 per thousand standard cubic feet in 2014, the gas producers, transporters and end users were yet to actualise the new pricing regime as the necessary modalities were not put in place for the implementation of this price regime.

    He stressed the need for Nigeria to get a collaborative gas distribution system between the private sector and the government, which would be led by the private sector, and based on an open access and economic tariff basis. This, according to him, would enable gas producers tie in to the nearest pipeline and reduce the security challenges facing gas distribution in the country.

    “In spite of the fact that we lack adequate pipeline transportation and distribution system, the disturbing thing is that the little we have has been subjected to attacks and sabotage over the last five years, a phenomenon that created the crisis this conference is trying to address,” he added.

  • Govt urged to monitor oil, gas industry

    The Managing Director/CEO, Oilflow Global Energy Limited (OGEL), Noah Yakub has called on the federal government to give a close monitoring to the oil and gas industry in Nigeria, saying such is needed for any form of growth to be recorded in the industry.

    Yakub, who spoke in Lagos, said there is need for periodic financial audit reports, noting that regular meetings with stake-holders where lapses can be established and consequently ironed out, will also be needful.

    He said for any headway to be made in the industry, a lot still has to be done to enhance capacity building, technical and financial growth, especially among Nigerians, having been given the privilege to operate under the Nigerian Local Content Act.

    “At OGEL, we are already sailing on the present state of the business environment to actualise our mission towards the global industry growth. With an improved environment as promised by the current administration we shall sail smoothly.

    “We have our strategies to operate in the industry. The most important strategy that we put up, is an integration of integrity and performance. With our performance, we also delight our customers with performance icing,” he said.

    He pointed out that when technical manpower is supplied, a system is put in place, such that “when they are on vacation, or they are on time off, we develop them by giving them a particular training established as relevant to their field.

    “We also have a structured system that recognises and appreciates talents and job performance accuracy. Besides, we also strategise by giving them relationship training in the sense that we train them on how to mix with people that they are not familiar with, how to mix with their bosses, peers and work environment so that they can have a sense of understanding. That is just a few out of the lots of our business strategies,” he said.

    Yakub, praised President Muhammadu Buhari for his selection and placement procedure, especially on the recent appointment of Dr. Emmanuel Ibe Kachikwu as the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), describing it as a perfect example of putting a round peg in a round hole

  • Nestoil to deliver multi-million dollar gas pipeline in 2016

    Nestoil, a local oil firm, is set to deliver multi-million dollar gas pipeline in 2016, the Group Managing Director, Obijackson Group, Dr Ernest Azudialu Obiejesi has said.

    The group is the parent company of Nestoil that is building the pipeline.

    Obiejesi said the pipeline known as OB3 pipeline is 48 inches by 67 kilometres, will help in transporting gas to power generation plants to improve electricity generation and supply.

    He said the pipeline would help in delivering gas to power plants located in the Niger Delta region and other parts of the country.

    Obiejesi said the pipeline is one of the major projects being executed by the Group, adding that the project was part of efforts to contribute to the growth of the nation’s energy sector.

    He said: “The pipeline known as OB3  is 48 inches by 67 kilometres. The pipeline is scheduled for completion in the first quarter of 2016. When the pipeline is completed, it would help in transporting gas from all the fields towards Oben across the Delta and to Escravos –Lagos pipeline where gas is supposed to be evacuated for the West and the Northern regions.

    He, however, said the completion of the project may be delayed till first quarter of 2017 in the event there are problems from the communities where the pipeline would pass.

  • ‘Increased gas supply boosts output from Egbin Power’

    ‘Increased gas supply boosts output from Egbin Power’

    Improved gas supply to power stations has helped to substantially increase the power generation from Nigeria’s biggest power station, Egbin Plc, it was learnt.

    The Chief Executive Officer, Egbin Power Plc., Mr. Dallas Peavey told The Nation that the impressive electricity supply being experienced by consumers, especially in Lagos State and other surrounding states, is due to increased gas supply and huge investment in new and upgrade of power infrastructure by the owners of the company, Sahara Power Group and the Korea Electric Power Corporation (KEPCO).

    Peavey said Egbin generates and supplies over 1,100 megawatts (Mw) of electricity to the national grid and hopes to reach plant’s installed capacity of 1,320Mw or a little below it. He assured that if gas supply is sustained, the output from the power plant would not only be sustained, but well exceeded.

    He said the 1,100Mw generation was attained last month and the company is gradually exceeding it, adding that in no distant time, the company will be generating the plant’s 1320Mw installed capacity and that will be good news for electricity consumers.

    “We want to help the government to achieve its aspiration of providing stable power supply to Nigerians,” he said, adding that Egbin was generating below 500Mw when the private sector investors took over in November 2013.

    Peavey said after the current owners acquired Egbin, they commenced upgrade and replacement of obsolete and dysfunctional equipment and materials. “We have injected about N50 billion into Egbin post-privatisation. We have brought unprecedented innovation, professionalism, human capital development and new technology into the power plant,” he said.

    He continued: “For instance, the control panels installed when the plant was built has been removed and upgraded to state-of-the-art digital panels. The main rehabilitation occurred in the first quarter of 2015, when the company successfully rehabilitated the plant’s unit six steam turbine (ST06), which added 220Mw to the plant.

    “We also restored the capacity of some of the units that were working below capacity and other ancillary equipment and materials. I assure you with these developments, Egbin Power Plc is now equipped to generate power at its installed 1,320Mw capacity.

    “Remember that the management is working on further expansion of the plant to achieve its vision of attaining 2,670Mw by 2017 and total capacity of over 10,000Mw in the next decade, if the demand permits.”

  • Fed Govt begins gas network code implementation

    The Federal Government has begun the implementation of the Nigeria Gas Transportation Network Code (NGTNC), it was learnt.

    The Director, Department of Petroleum Resources (DPR), Dr Mordecai  Ladan, stated this on the sideline of the just concluded 2015 conference and exhibition of the Society of Petroleum Engineers (SPE) held in Lagos.

    The code   NGTNC is a contractual framework between transporter (or network operator) and network users (known as shippers) that provides open competitive access to existing and future gas transportation infrastructure. The code stipulates that every gas meant for domestic use be it power, petrochemical or industrial, will have a single entry and exit point to eliminate sharp practices that exist in the current supply and distribution system.

    Ladan said stakeholders in the sector had earlier met in Abuja, the Federal Capital Territory, to discuss the way forward to ensure smooth implementation of the code. He said part of the implementation exercise of the NGTNC is the training of 20 personnel outside the country under the guidance of foreign partners.

    The steps taken by the government, according to him, is to help eradicate the bottlenecks and problems in the system, adding that the approach may help in ending gas flaring in the country from the end of 2020, but noted that adequate funding is required to achieve it.

    To further reduce or eliminate gas flaring, the Nigerian Gas Company  (NGC) said gas supply to power plants will increase by additional 800 million standard cubic feet per day (MMscf/d) by the end of next year. The increase in supply will be created by market forces where there will be a willing-buyer, willing-seller situation.

    According to NGC, although the willing-buyer, willing-seller situation is currently in place, the government needs to implement the $2.50 per 1000 standard cubic feet pricing regime for gas in order to help gas suppliers boost supplies to the market. The successes of increase in gas supply to power plants, also depends on adequate regulatory framework on the commercial side of the sector.

    Its immediate past Managing Director, Dafe Sejebor, said: “Regulation has a major role to play for effective gas supply. Regulation should be looked at more on a commercial basis and we don’t want to forget that time is of essence. Government should implement regulations on time.’’

    Sejebor noted that the reluctance of upstream oil and gas companies to invest in domestic gas production is as a result of low pricing while uneconomical gas-to-power price framework is stalling growth of the gas industry. He said the inadequate funds for infrastructure development and limited appetite of Nigerian banks to invest in long to mid-term projects as well as host community issues, work against gas industry’s growth.