Nigeria will within the next couple of months record another significant leap in oil and gas development, unitization, utilization, gas flare down, power generation, and efficient environmental management, as Shell Petroleum Development Company of Nigeria (SPDC) begins technical commissioning of the multibillion-dollar Gbaran Ubie Integrated Oil and Gas Project, one of Nigeria’s biggest oil and gas development facilities in the Niger Delta.
Test run of the facility, located some kilometers away from Yenagoa, the Bayelsa State capital, which commenced in the first quarter of this year, has seen the technical certification of the gas dehydration and liquid handling trains, process control and safeguarding systems, utility systems as well as wells and associated flowlines and pipelines.
Briefing some Bayelsa-based bureau chiefs on a guarded tour of the facility last Friday, Project Manager, Okechukwu Elechi, said the liquid disposal and gas transport lines will also be commissioned in a few weeks.
Elechi explained that, “during the technical commissioning, key facilities are tested prior to introducing hydrocarbons to see how they perform”, stressing that since industry practice demands compliance with this phase process, it was only natural that the Shell project follows international best practice before kick-starting operations.
According to him, “complex and extensive facilities like those on the Gbaran Ubie project require phased commissioning, and we plan to run these tests for nine to 12 months” to ensure technical conformity, synchronization and efficiency.
The Tide recalls that when fully operational, the Gbaran Ubie plant has a nameplate capacity to produce one billion standard cubic feet of gas and more than 700,000 barrels of oil per day.
The Tide checks further show that a gas processing facility, with capacity for 80million standard cubic feet of gas per day (MMscf/d) has been built near the Central Processing Facility (CPF) to treat and supply gas to power the Federal Government’s National Integrated Power Project (NIPP) now being constructed at Gbaran as well as the Bayelsa State Electricity Board’s plant at Imiringi.
The facility will pump a significant proportion of produced crude oil to the export terminal at Bonny, with a reserves tank farm of over 60,000 barrels per day, and also provide gas feedstock to Nigerian Liquefied Natural Gas (NLNG) facility at Bonny.
Besides, The Tide gathered that the facility will also scoop and absorb currently flared gas at Kolo Creek and Etelebou flowstations into the CPF, triggering gradual shutdown of both gas flowlines and nods, and a drastic reduction in Shell’s overall gas flare profile in the region.
The project manager recalled that before construction activities commenced at the site some three years ago, strategic environmental impact assessments for different aspects of the project including, processing facilities, wells and flowlines, gas and crude oil export pipelines and logistic base and jetty were conducted, while the host communities were widely consulted to make their inputs on ways to mitigate project impact through scoping workshops, open fora and public display of draft EIAs.
Elechi noted that although the five wells drilled as part of this project at Koroama, Zarama, Kolo Creek and Gbaran have been tested, while additional six drilled at Gbaran and Zarama are yet to be tested, the communities were fully carried along as work progresses.
He explained that “new gas wells are tested after being drilled to confirm their safety and integrity”; just as “the well test fluids are disposed of using temporary flares”, stressing that “we have consulted with our neighbouring communities, who are fully aware of the situation, and received all necessary permits for these”.
The project manager hinted that after commissioning and stabilization, the flare stack at the site will have a small pilot flare to ensure the flare system is always ready for an emergency plant shutdown, which is a normal industry practice, and does not amount to a grand design for new gas flares by SPDC.
Instead, he said, the entire concept and design of the project was meant to reduce gas flaring, mitigate the impact of crude oil exploration and production, and further boost the nation’s quest for efficient energy supply through clean power generation, while maximizing opportunities for increased gas unitization and utilization in the country.
DAPPMAN Raises Concern Over FG’s New Tax Regime
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has expressed concern over the new 0.5 per cent tax on gross turnover of the petroleum marketing firms proposed by the Federal Government.
Executive Secretary, DAPPMAN, Mr Olufemi Adewole, said at the maiden edition of the Platforms Africa Continental Forum in Lagos, that the tax would put many firms out of business.
Adewole said there were indications that fuel distribution crisis may soon hit the country, if the government implemented the new tax regime.
He was emphatic that more than half of the fuel marketing firms in Nigeria would close down, if the tax burden was slammed on them.
According to him, the imminent closure of businesses poses threat to the smooth distribution of petroleum products across the country.
“The petroleum marketing firms’ trading margin is too small that they cannot pay such amount sustainably.
“Petroleum marketers operate a very low margin but the turnover is very huge. Unfortunately the margin does not correspond with the turnover,” said Adewole.
He added that the margins they made when fuel sold at N40 per litre was the same when the price rose to N160 per litre and N200 per litre respectively.
According to him, “The Finance Act 2020 says the marketers have to pay 0.5 per cent from their gross turnover by the end of this year.
“It is unimaginable that probably half of the petroleum marketing firms existing now may go under, if the new tax regime is implemented.
“Except the regulator which is Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) approves a new margin for the marketers.”
He said the association had called on government to give petroleum marketers access to foreign exchange at the official Central Bank of Nigeria (CBN) rate to enhance the supply and distribution of Premium Motor Spirit (PMS) across the nation this yuletide season.
According to DAPPMAN, shortage of foreign exchange (forex) coupled with several unauthorised levies, bad roads are among the factors making fuel importation and distribution burdensome for members.
The Tide source reports that the fuel marketers recently bemoaned the acute scarcity of forex in the official market, which is currently threatening the importation, distribution and impacting deeply on prices of petroleum products across the country.
Niger Wants NNPCL To Establish Truck Transit Parks
Niger State Government has urged the Nigerian National Petroleum Company Ltd. (NNPCL) to establish truck transit parks in some strategic parts of the state to reduce traffic on highways.
The government identified towns such as Tafa, Suleja, Mokwa, Bida, Tegina, Lambata and Minna as major areas to be given attention in that regard.
The Permanent Secretary in the Ministry of Mineral Resources in Niger State, Alhaji Abubakar Idris, made the call during the meeting of National Council on Hydrocarbons organised by the Ministry of Petroleum Resources in collaboration with the State Government.
According to him, the establishment of the parks in the identified areas will reduce traffic on highways and generate revenue for the state and country at large.
In the meeting entitled: “Roadmap and Strategic Option towards achieving energy transition in Nigeria”, Idris presented a memorandum from the State Government to the council on the need for the establishment of the transit parks.
He explained that it would also create a partnership between the state and federal government to reduce the negative effects of heavy road traffic on highways.
He explained further that the trucking industry was indispensable to the Nigerian economy as “truckers are responsible for delivering fuel from depots to filling stations where they are dispensed.
“For these reasons, funds need to be released to build truck parks for ease of operations”, he said.
He also called for the establishment of a frontier basin development commission with its headquarters in Niger State.
According to him, the establishment of the commission will expedite the effective implementation of Petroleum Host Community Trust Fund and frontier basin exploration fund as captured in the Petroleum Industry Act 2021 with headquarters in Niger.
He said Nigeria’s frontier basins consist of Anambra basin, the lower, middle and upper Benue trough, the South eastern sector of the Chad basin, the Mid-Niger (Bida) basin and Sokoto basin.
According to him, the basins would be better positioned for the opportunities in the hydrocarbons natural gas, oil and other minerals.
He noted that the establishment of frontier basin development commission would offer greater opportunities to actualise the state dream of oil and gas economic value-chain and industrialisation in Nigerian frontier basins.
Motorists Groan Over Fuel Scarcity
Long queues resurfaced in Lagos as motorists spent hours at filling stations to buy Premium Motor Spirit (PMS), popularly known as petrol.
The situation was worse on Ikorodu Road, Maryland, Ikeja, Anthony, Bariga, Ilupeju and Gbagada areas as motorists were agitated for spending hours on queues.
The Tide source reports that the development left commuters stranded with gridlocks in major areas of Lagos as motorists queued to buy the product.
The source also reports that only filling stations owned by Major Oil Marketers Association of Nigeria (MOMAN) had petrol and sell at the regulated price of N170 per litre.
Some stations owned by Independent Petroleum Marketers Association of Nigeria (IPMAN) sell between N200 and N210 respectively.
A motorist, who identified himself as Mr Foluso Saliu, told the source that he had been on the queue since 6.30 a.m. hoping to get fuel and return to work.
He said government should find a lasting solution to petrol supply in Lagos to avoid panic-buying.
“Scarcity has been frequent during the ember months and l hope it will be addressed,” he said.
Another motorist, Mr Julius Albert, urged filling stations to avoid selling petrol in jerry cans to allow vehicles to buy on time.
Albert appealed to the government to fully deregulate the downstream sector of the petroleum industry if that was the solution to availability of petrol without stress.
According to him, the product seems to be available in some filling stations but they choose to hoard it and sell at higher prices.
Queues were seen at Mobil, NNPC, Conoil, Oando and Nipco filling stations on Ikorodu Road.
Also, queues were cited at TotalEnergies, TMAAC on Bank Anthony Road and Conoil, opposite LASUTH.
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