The Nation Newspaper

Tag: Gas

  • ‘90% of gas cylinders in Nigeria are expired’

    ‘90% of gas cylinders in Nigeria are expired’

    About 90 per cent of the Liquefied Petroleum Gas/cooking gas in Nigeria are obsolete and need to be replaced, the Programme Manager, National Liquefied Petroleum Gas Implementation (Office of the Vice-President, Dayo Adeshina, has said.

    At the just concluded 7th Annual LPG conference and exhibition, held in Lagos,  Adehina, said obsolete  gas cylinders has become a major issue in the LPG sub-sector of the nation’s gas industry, adding all efforts to do something on it has failed.

    According to him, the stakeholders have been campaigning  for the ban on the use of old gas cylinders, with a view to make the  Federal Government revive the moribund gas cylinders in the country.

    He said the use of old cylinders is disturbing, adding that it has a negative consequence on the society, adding that it has put many families in dangers.

    Obsolete cylinders, he said, has raised an alarm over the non-testing and proliferation of expired gas cylinders in circulation across the country, saying cylinders outlive their safety after 15 years.

    He said; “We need to invest in cylinders and proudly one of the investors would have its cylinder operating plant opened in January. We also need to have cylinder re-proliferation plants.”

    He however, also faulted the regulation in the sector, saying “We need to take care of the regulatory and fiscal policy. Enforcement needs to play a big role. There is going to be ashakeup of regulation because the government has seen that if we ever have a repeat of the incident we had in Nnewi, it is dead on arrival.”

  • WAPCo to increase gas supply to Ghana, others

    WAPCo to increase gas supply to Ghana, others

    The West African Gas Pipeline Company (WAPCo) will  improve  supply of natural gas to thermal plants and industries in the sub-region, its General Manager, Corporate Affairs, Mrs Harriet Wereko-Drobby, has said.

    She said the firm is ready to increase gas transportation to turbines and industrial entities, if there is no further attacks on oil and gas installations and its attendant declaration of force majeure on those facilities.

    According to her, WAPCo gets   gas from N-Gas2 owned by the Federal Government, Shell and Chevron, among others.

    Wereko-Brobby said: “It has become imperative for WAPCo to increase gas supply to its customers in the sub-region, following the completion of its 678- kilometre pipeline, which is the basic infrastructural facility for moving gas. The firm built the pipeline at $1billion and the term has come to leverage it to increase gas supply to West Africa.

    “In view of the fact that gas plays a major role in electricity generation, WAPCo supplies 85 per cent of its gas to power firms, while industries get 15 per cent.”

    She said the firm is transporting gas to its customers through its pipeline network, which runs from Itoki in Ogun State to Badagry in Lagos State to Cotonou in Benin Republic to Lome in Togo and terminated at Tema in Ghana.

    The firm, Bereko-Brobby said, has entered a commercial stage, in which it has to make commercial value out of gas transportaton.

    In an interview with The Nation, at the quiz competition for secondary pupils organised by the firm in Badagry, Bereko-Brobby said making commercial value out of gas transport was key to the survival of the company.

    She said the Nigerian National Petroleum Corporation (NNPC) owns 25 per cent stake in WAPCo, making it the second largest shareholder after Chevron West African Pipeline Limited with 36.7 per cent stake.

    Others, she said are Royal Dutch Shell 18 per cent stake;  Volta River Authority of Ghana 16.3 per cent and Societe Togolaise de Gas(So ToGas- 2 per cent. She said the shareholders were motivated by the desire to make gas available for users in the sub-region and to also get returns on their investments.

    WAPCo is transporting 70million standard cubit feet of gas per day (scfd) to its customers in sub-region.

    The firm’s Chief Executive Officer, Walter Perez, attributed the feat to the drop in pipeline vandalism.

    Perez said there has been stability in product supply, as pipeline vandalism dropped significantly.

    He said the company is on the verge of meeting the demands of its customers, as it now transports 70million standard cubit feet per day of gas (scfd).

     

  • NNPC, Chevron seal $1.7b deal to raise oil, gas production

    NNPC, Chevron seal $1.7b deal to raise oil, gas production

    Nigerian National Petroleum Corporation (NNPC) and Chevron Nigeria Limited (CNL) have signed the second and final phase of an Alternative Financing Agreement that will increase crude oil production by about 39,000 barrels per day.

    The agreement, which was signed in London at the weekend, is also expected to achieve an incremental peak production of about 283 million standard cubic feet per day (MMSCFD) of gas.

    NNPC Group Managing Director Dr. Maikanti Baru, who signed on behalf of his corporation, said the increment to be achieved by the agreement would spread “over the remaining life of the asset (until 2045)”.

    The corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, in a statement yesterday, said the project, which is about 92 per cent completed, will cost about $1.7 billion, with $780 million expected to be funded by a third-party.

    The project will produce natural gas liquids and condensate extracted from the Sonam and Okan fields located in OML 90 and 91 in the Niger Delta.

    Baru described the deal as a step in the right direction, which would grow the nation’s daily production and support the Federal Government’s strategic domestic gas-to-power aspirations, while aligning with NNPC’s 12 Business Focus Areas (BUFAs).

    He said the project would also include the completion of the Sonam non-associated gas (“NAG”) well platform and Sonam living quarters platform; drilling of seven wells in the Sonam field and the Okan 30E NAG well; as well as the completion of the 20″ x 32Km Sonam pipeline and Okan pig receiver platform and development of the associated facilities.

    “As we speak now, the facilities are 100 per cent completed while wells are 40 per cent executed,” Baru stated.

    “In carrying out the project, the NNPC/CNL JV adopted a two-staged financing approach. Stage 1 which provided $400 million sourced from Nigerian commercial banks (NCBs) achieved financial close on 1st August 2017, Stage 2, (signed today), is set to provide $380mn from international commercial banks (ICBs).

    “Out of the US$780mn total financing for both stages, Chevron’s co-lending totals US$312mn while NNPC’s portion of the total facility stands at US$468mn,” the statement said.

    Baru explained that it was aimed at plugging NNPC’s shortfall in funding JV cash call obligations, including settlement of pre-2016 cash call arrears.

    “It will also enable full funding of NNPC’s JV obligations to restore investors’ confidence and stimulate further Foreign Direct Investments (FDIs) as we are beginning to witness,” he noted.

  • Axxela eyes $147m capex for gas infrastructure, others

    Axxela Limited, formerly Oando Gas and Power, has made a capital expenditure projection of about $147 million to develop its gas supply infrastructure in Lagos and Port Harcourt, Rivers State, as well as the development of the Ajaokuta mini liquefied natural gas in Ajaokuta, Kogi State.

    Axxela Chief Executive Officer, Bolaji Osunsanya, in an interview with The Nation, said the amount is a bulk budget for the projects,  but these will be carried out in phases and may run for the next two or three years. He also stated that the company is eyeing expansion into  regional opportunities and has secured shipping licence from the West African Gas Pipeline Authority (WAGPA), adding that arrangements have been concluded for the first gas supply to a West African country.

    Giving a breakdown of the capital expenditure, Osunsanya said the money will be spent more on maximising existing assets of the firm, adding that some of them are organic developments. He said the company wants to build the 5th and 6th phases of its Lagos franchise, Gaslink.

    ‘’The 5th & 6th Phases will cost the company about $50 million and will be used, in developing sub-segments that will connect Igando to Ikeja, while the mini LNG will cost the firm about $60 million. The Port Harcourt expansion has already cost us about $7 million and the planned expansion to Omagua and Chioba industrial clusters will cost us about $30 million, he added. These are bumper numbers that we will use to develop them but it will be in phases, he said.

    He further said: “Gaslink is our Lagos franchise and today we carry 160 customers on it selling about 65 million standard cubic feet of gas per day (mmscfd) and we plan to sell 100mmsfcd from it in the next two to three years. Therefore, we have to do more expansion and give gas to more factories.

    “We are looking at doing Phase 5 which will be from Iba Road on Festac near Lagos State University  LASU back to Ikeja; Motorways all the way to  Gbagada, which will take us to almost all parts of Lagos, so there should be no industrial part of Lagos that will not have gas supply infrastructure. So, with phases 5&6 in Lagos, we will fully maximize Gaslink.

    On the company’s plan for PortHarcourt  axis, he had this to say: ‘’We also want to grow Port Harcourt gas grid.We have extended it to Court area, the next thing is to do Omogua industrial cluster, Airport and Chioba industrial cluster and also maximise the total capacity of our compressed natural gas (CNG) plant and use the mini LNG to supplement it.”

    On change of name to Axxela, Osunsanya said: “Last year we made an announcement about new investors in Oando Gas and Power. The new investors are Helios Capital Partners, which is the bigger investor. We thought it was necessary to change the name to reflect this new shareholding. They are big African-based infrastructure fund. They have about $3 billion in assets and investments.

    “They are in Airland, ARM pensions, Vivo, and Co-partners in OVH Energy, among others. They have the necessary experience doing infrastructure business in sub-Saharan Africa. The premise of their coming into Oando Gas and Power is that they liked our history as a gas and power infrastructure business and they thought coming and putting in the necessary capital would help us achieve growth. So it is a growth model.

    “But our own way of looking at this change is to leverage the two strengths. Oando on one hand has good market access, a formidable and local content platform and more importantly, Oando gives us access to resources. Oando is a member of the Joint Venture, you can  get gas from them and they also allow us access to all their other footprints. Helios on the other hand brings a lot of capital and wealth of management experience running growth companies in Africa. We are already in the last eight or nine months seeing the benefits of this marriage.”

  • FG to focus on good refineries, gas commercialisation in 2018

    FG to focus on good refineries, gas commercialisation in 2018

    The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, on Monday said government would focus on making refineries work and commercialising gas in 2018.

    In a podcast released by Kachikwu in Abuja, he said government would also bring in the private sector to restructure dilapidated infrastructure.

    ”To the big picture of 2018 and early 2019, what are the key things we are going to focus on? First is the refineries. I have talked about this over again, it is important that we get these refineries working.

    ”We must exit importation in 2019 and we are happy Dangote is working very hard and bringing back the timeline for the completion of his refinery.

    If we can do that, we are going to be saving the country over 30 per cent of forex application on importing petroleum products.

    ”Gas flare commercialisation, we have launched it, it is taking off, we are continuing to deepen our conversation with oil companies to ensure that we exit gas flare in over gas flare sites.

    ”Infrastructure is key to us, our infrastructure is 30/40 years old, completely dilapidated, can’t be funded by the government anymore.

    “I am working with the NNPC and DPR to launch our infrastructure masterplan and bring people who can invest in them.

    ”There is the issue of crude tracking – how do we track every molecule of products we have, crude and refined products? We are putting together an IT platform that will enable us do this, we are working with DPR and hopefully by the 2019 the issues of whether we could not account for our crudes will no longer occur.

    ”We are planning our marginal fields’ rounds and we are also planning our inland basins rounds. It is going to be a transparent process to bring people to get us more oil.

    “The rules are going to be out soon once it is approved by His Excellency,” he said.

    Kachikwu said the he would like to see the sector hit 2.2 million barrels though subject to OPEC constraints and fixing the infrastructure was essential to this.

    He said the government being able to exit the joint venture cash call had reassured multinationals of their need to invest in the country and they had invested over $14-15 billion dollars, which were for purposes of projects like Zabazaba and Bonga extension.

    ”We delivered an open NNPC, a lot of work still needs to be done there.

    ”We are going to be rolling out our fiscal policies which are now awaiting FEC approval.

    “Those fiscal policies will expand income in the short term over $2 billion a year to the Federal Government but on a long term over $9 billion.

    ”On the back of that, we will be working with the assembly to transmit that into legislative provisions,” he said.

    The minister said he would be going back to the Niger Delta to meet governors of the region and oil companies, to put a ‘seed’ to some of the agreements on ground. (NAN)

  • Nigeria’s gas flare rate dips to 12%

    Nigeria’s gas flare rate dips to 12%

    Nigeria gas flare rate stands at 12.00percent, the Nigerian National Petroleum Corporation (NNPC) Monthly Financial and Operations Report for August has revealed.

    The report which was released yesterday in Abuja showed that the 12.00 per cent gas flare rate which translates to 919.73mmscfd  compared to 10.03 per cent for the preceding month of July 2017.

    According to the NNPC statement,  Nigeria was among countries with highest gas flare rates, saying that a number of Clean Development Mechanism (CDM) projects aimed at appropriate gas utilisation have improved the country’s standing in this regard.

    The report gave an average gas flare rate of 10.15 per cent, which is 734.56mmscfd, for the period from August 2016 to August 2017.

    The monthly report also showed that despite enormous challenges facing the downstream sub-sector of the oil industry, the NNPC has continued to maintain adequate products supply nationwide.

    It attributed the success story to strategic interventions by the Corporation in respect of diesel supply, revamp and re-commissioning of critical pipelines and depots across the country, as well as robust engagement with critical downstream stakeholders such as Major Oil Marketers Association of Nigeria, (MOMAN), Nigerian Association of Road Transport Owners (NARTO), Petroleum Tanker Drivers Association of Nigeria (PTDAN) as well as the Independent Petroleum Marketers Association of Nigeria (IPMAN).

    The NNPC lamented that pipeline breaches stood at 70 points for the month of August 2017 out of which 62 pipelines were vandalised.

    The strategic Port Harcourt-Aba pipeline was singled out as a major culprit, accounting for 46 vandalised points (or 74 per cent of total recorded cases).

    To tackle the challenge, the oil firm, in collaboration with the Federal Government, has continued to engage members of various host communities to address the issue.

    The NNPC Report also listed security synergy with International Oil Companies (IOCs) as part of the steps taken to stem oil and gas sabotage. This, it said  involved the deployment of a structured and holistic security apparatus in operational areas.

    The NNPC report further revealed that 950.67 million litres of white products were distributed and sold by the Petroleum Products Marketing Company (PPMC) during the period under review. Although the figure was lower than the 1,121.92 million litres in the preceding month, it was nontheless enough to ensure adequate supply of petroleum products.

    A further breakdown of the figure indicated that petrol distributed during the period under review was 814.02 million litres, kerosene supply stood at 59.92 million litres, while 76.73 million litres of diesel was also distributed to the domestic market.

  • Gas key to Fed Govt’s diversification plan, says NGA

    Gas key to Fed Govt’s diversification plan, says NGA

    The Nigerian Gas Association (NGA) has said the inclusion of gas sector in Federal Government’s economic diversification plans will engender substantial growth.

    NGA Chairman Mr. Thomas Dada stated this during a night with Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, and inauguration of NGA Advisory Board in Lagos.

    Dada said the inclusion of the gas sector in the economic diversification plans of the government became necessary in order to fully tap into opportunities that abound in the sector.

    He said the sector hsld  much prospects in view of its 187 trillion standard cubic feet (scf) of proven gas reserves and over 600 trillion scf of unproven gas reserves at the disposal of Nigeria.

    The NGA organised a dinner for the chief executive officers of oil and gas companies at the Eko Hotel & Suites, Lagos where Baru was the special guest of honour. Dada said the gas sector had potential that could easily translate to growth. He said the potential if well harnessed, would accelerate the growth of the economy.

    He said gas is used for domestic purposes by individuals and industrial concerns and petrochemical industries as well as by turbines to generate electricity. It is also exported as liquefied product, among other usages.

    Dada said: “Gas is used across the value chain. The power generation companies (GenCos), fertiliser companies, refinery plants and other institutions use gas a lot. Gas has a multiplier effect on the economy as it provides windows for improving productivity and earning income for the operators including the government. Diversification seeks to move the country from a mono-economy, which is oil, to a multiple economy that comprises of various sectors. Diversification engenders growth and gas would help in this regard.”

    He said while some potentials have been discovered by the operators including the government, others are yet to be unearthed, urging the government to put in place concrete measures to discover and utilise them well for the growth of the economy.

    According to him, the sector provides net revenue for the government, after oil, advising the government against focusing on non-oil sectors alone, in its diversification programmes.

    Dada said gas is the only antidote to the power problem in Nigeria where about 70 per cent of the electricity generated is through the gas turbines.

    “Once gas is made available for the power sector, there would be electricity and economic growth. Companies depend solely on power for operation and the moment firms have electricity to bank on, activities and revenue would shoot up. More people would get jobs and the Gross Domestic Product (GDP) would increase as well. Conversely, where there is no gas, there is no power and no economic development,” he added.

    He observed that some fields that contain associated gas are idle due to neglect, advising operators to explore gas in those fields with a view to improving productivity in the economy.

    Dada said huge gas deposits are available upstream, midstream and downstream segment of the oil and gas sector for collection, warning against wastage of the resources.

    Also, Dr. Maikanti Baru said stakeholders in the gas sector must play one role or other if gas will influence the growth of the economy. He said the issue of making gas contribute to economic growth must be left at the doorstep of the Nigerian Gas Association alone, and enjoined the support of the Advisory Board that was constituted by NGA on the matter.

    The Board, Baru said, is made up of tested and experienced personnel in the oil and gas industry, adding that it is time for them to make their experience to bear on the gas sector.

     

  • Lagos: our interest is gas to power economy

    Lagos: our interest is gas to power economy

    •PPPRA ‘has lost relevance to PIGB’

    The Lagos State government yesterday said it is more interested in gas to generate power to run the engine of its economy.

    It has therefore urged the Federal Government to allocate the remaining oil blocks in the Dahomey basin for more oil prospecting.

    Its Commissioner for Energy & Mineral Resources, Mr. Olawale Oluwo, who spoke yesterday at a Breakfast Business Lecture organised by the Island Club in Lagos titled: Petroleum Industry Bill: Challenges and Opportunities, said the state government will take advantage of the rare oil discovery in Dahomey basin.

    He said: “Our interest is not in oil but in gas. We need gas to power Lagos economy. “Our programme is centred on power generation that will be off-grid.”

    Oluwo also said the Petroleum Products Pricing Regulatory Agency (PPPRA) will have no business in the downstream sector when the Petroleum Industry Governance Bill (PIGB) comes into operation.

    He said the establishment of the Nigeria Petroleum Regulatory Commission (NPRC) in the PIGB will make the PPPRA irrelevant.

    According to him, the NPRC will be a one-stop regulatory body, so PPPRA will have no business in the downstream when the NPRC comes into force.

    Oluwo who was the chief host at the meeting, advocated for a downstream driven by the forces of demand and supply. He said  a deregulated downstream is the way forward for the country. According to him, the Federal Government has been regulating petrol price through which the rich take advantage of the masses. This is not correct, he argued

    “If you must regulate fuel price, you must ensure that you have a very deep pocket to subsidise the products. If you don’t have a deep pocket, the market will help you by creating a black market that sets the appropriate price for the product. But if the price is driven by the forces of demand and supply, competition will set in and force down the price,” he said.

    He cited the case of the price of Global Systme for Mobile (GSM) communications subscriber identity module (SIM) cards which are now being given free of charge today.

    He recalled that in the past, a SIM card costs over N30,000 but competition has made it to be given freely today. “So, I don’t belong to the school of thought that says prices that go up in Nigeria will not come down.

    “Prices do come down as long as there is competition. I like the PIGB and we will like to see more reforms in oil and gas. It is in Nigeria that I see products and commodities that are characterised by inelastic demand and for which we can’t have close substitutes to be subsidised by the government.

    “So our problem is structural and we must continue to handle it from the structural correction perspectives. In Nigeria, we subsidise all commodities including electricity, gas, petrol, interest rates, foreign exchange, among others. Government should allow the private sector play its role in all these,” he added.

    He congratulated The Island Club for the business meeting and Folawiyo Petroleum for making Lagos State an oil producing state.

  • NCDMB creates council for R&D in oil, gas

    NCDMB creates council for R&D in oil, gas

    A Research and Development (R&D) Council will be constituted for the oil and gas industry to integrate research initiatives of stakeholders.

    It will also steer them towards achieving tangible and beneficial outcomes, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said.

    He stated this at the just concluded maiden Nigerian Oil and Gas Research and Development Fair and Conference held in Lagos. He said  members of the council will include representatives of operating and service companies, relevant agencies of government, the academia, Nigerian University Commission (NUC) and top research centres in the country.

    According to him, R&D efforts by stakeholders need to offer real value and relevance to the oil and gas industry so that companies would support and fund them. He said the Board would change the framework of executing and funding research in the industry, noting that R&D would henceforth form part of deliverables on projects. “R&D will be treated like capacity building initiatives and we will close gaps. The Board will fund good research projects; companies could also be asked to take up research ideas and fund. We want quick wins and such research must solve problems and get to deployment stage.”

    He assured that oil industry’s research interventions would be very focused and devoid of distractions.

    Wabote said: “We will deal with this the same way the oil and gas industry deals with its business.

    “The Board will establish research clusters covering engineering studies, geological and physical studies, local material substitution and technology adaptation in four universities in Nigeria.

    “We will utilise Fairs like this to identify top-five research presentations for development finance consideration by the operators and other government agencies. Already, we have selected five foremost researchers in the oil and gas sector that shall be awarded a pilot grant of N56 million. This will assist in developing their inventions further to commercially acceptable standard products.”

  • Petroleum Ministry’s maiden oil, gas trade show coming

    Petroleum Ministry’s maiden oil, gas trade show coming

    The Ministry of Petroleum Resources will assemble upstream, mid-stream and downstream oil and gas experts from around the world for its inaugural Nigeria International Petroleum Summit (NIPS) scheduled for next February, at the International Conference Centre (ICC), Abuja.

    According to the summit’s Project Director, James Shindi, this will be the biggest technical and strategic business conference in the petroleum sector in Africa, as it will present best practices and emerging technologies to engineers, scientists, the academia, managers and executives.

    The conference will exhibit companies that would feature the latest products and services.

    ‘’Industry professionals and companies know the value and return on investment of meeting and networking at gathering such as this, where the world will meet Nigeria oil and gas.  Simply put, this event will explore innovations and technologies covering all things upstream, mid-stream and downstream,’’ the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said.

    This will be reinforced through the attendance of  key political leaders, government officials and industry’s specialists from the National Oil Company(NOC) and other relevant government bodies and chief executive officers (CEOs) of National and international oil companies, multinationals and multilateral organisations, the academia and other relevant stakeholders, among others.

    Vice President Yemi Osinbajo launched the Nigeria International Petroleum Summit 2018 in the presence of 19 African Ministers of Petroleum and delegates who attended the African Petroleum Producers Organisation (APPO) meeting in Abuja.