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.
Stakeholders Want Policies To Harness Gas Resources
An earlier plan by the defunct Petroleum Equalisation Fund (PEF) to equalise the consumption of gas, especially Liquefied Petroleum Gas may no longer fly as the government said subsidising the transport cost of the commodity in the face of a liberal market may not work.
This is just as stakeholders were demanding for deliberate policies that would enable the country to harness gas resources to benefit from the global energy transition agenda.
While the defunct PEF had disclosed earlier this year that a scheme to pay for the transportation of gas as part of an effort to encourage the use of cooking gas in homes across the country was being considered, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said such a move may be unnecessary.
Executive Director, Distribution System, Storage and Retail Infrastructure at NMDPRA, Ogbugo Ukoha said although Nigeria has gas in large quantities, bottlenecks undermine realisation of full potential.
Speaking in Abuja recently on equalisation for gas, Uhoha said: “the Act provides for liberalisation. We can’t set prices, we can’t equalise it.”
According to him, the market would stabilise at some point and deal with prevailing issues. The Independent Petroleum Producers Group (IPPG), headed by Abdulrazaq Isa, has also noted the right policies were necessary if Nigeria would benefit from its gas resources.
Stressing on the evolving industry landscape, ongoing industry reforms, IOCs’ divestment, and the role indigenous exploration and production companies can play in this new era in guaranteeing the nation’s energy security, Isa said: “Nigeria cannot afford to be left behind in view of the global energy transition agenda. Natural gas should be considered as a transition fuel with deliberate policies formulated to attract investment into the sector.”
While noting that the PIA enactment will set a solid growth foundation for the entire industry, the IPPG Chairman said it was imperative that effective regulations are formulated to derive the full benefits of the Act.
According to Isa, ‘’industry-wide consultation in the enactment of regulations is required to promote inclusivity and ensure robustness of regulations’’.
The IPPG Chairman also identified key challenges being faced by the industry in the areas of security, funding, high operating costs, lengthy contract cycle, amongst others.
’’We look forward to collaborating with the NUPRC in finding long lasting and sustainable solutions to these challenges,’’ Isa said.
Obasanjo Makes Case For Renewable Energy For Power Generation
Nigeria’s former President, Chief Olusegun Obasanjo, has urged the country to embrace renewable energy for power generation.
Obasanjo, who led the country as military Head of State between 1975 and 1979 and civilian President from 1999 to 2007, made the call, last Friday at the inauguration of a two megawatts, MW, solar power project at the Olusegun Obasanjo Presidential Library in Abeokuta, the Ogun State capital,
He said solar energy is remarkably cost effective as it costs less than two and half years’ supply of diesel to power the generators at the Library and that the project marks one of the enduring personal legacies he is proud to call his own.
“Today, I am speaking to you in a facility powered by the sun – solar energy. It is the way of a future Carter envisioned all those years ago. It will help build the future we want. The Olusegun Obasanjo Presidential Library solar power project is a reflection of our commitment to clean and renewable energy and is the single largest investment this not-for-profit organization has made.
“As large an investment as it is, it is remarkably cost effective. It costs less than two and half years supply of diesel to power our generators. So in diesel terms it pays for itself in less than 3years. So in effect the electricity it produces after three years is almost at no cost,” Obasanjo said.
He noted that solar energy does not emit any green house gases that diesel generators do, and that, as such, it has the potential to earn carbon credits which are currently priced at US$40 per ton.
He added: “Based on estimated annual production of 2,307,000 kilo Watt hours per year, we can expect to earn nearly US$39,589 in carbon credits per year.
“By monetising this facility with strategic sponsorships and marketing alliances we will be able to generate revenue.
“Combined, this solar facility can generate electricity, generate revenues that contribute to the upkeep of the library, help save the planet making a small contribution to climate mitigation and adaptation, provide shade for parking, and be an inspiration for future generations. Who says you can’t make a profit out of saving the planet?”
CSOs To Hold Confab On Fuel Subsidy Removal
Civil Society Organisations (CSOs) in Nigeria operating under the aegis of Civil Society Coalition for Economic Development (CED), on Thursday, said plans were afoot to organise a conference on ‘Fuel subsidy removal’ in Nigeria.
The coalition, which comprised 82 groups, disclosed this at a press conference in Abuja on Thursday, stressing that they were committed to pushing for subsidy removal as well as engaging other stakeholders in some sectors of the economy to see reasons with the government on the need to lay fuel subsidy payment to rest.
The convener of the group, Comrade Yusuf Dan Maitama, further said that the proposed theme of the conference is “Subsidy removal and the Future of Nigeria’s Economy,” adding that there was no better time for the total removal of fuel subsidy than now given the economic challenges the nation is going through.
According to the coalition, the conference which is slated for Tuesday and Wednesday next week will take place in Abuja and Lagos, featuring world-class resource persons in the oil and gas sector in order to refocus activities of Nigeria’s oil and gas sector and to secure the nation’s resources for its critical mass rather than private pocket benefactors.
The coalition lamented that the fuel subsidy regime which had been in place for the past 20 years, has enriched a few individuals and denied citizens of what was supposed to be a collective wealth, adding that moves by the present administration to end the subsidy regime were the right step.
Citing further reasons for the conference, the coalition posited that the Nigeria National Petroleum Company’s commitment to implementing a policy that ensures total removal of subsidy should be supported by all.
“The fuel subsidy regime has in the last 20 years done more harm than good to the economy of the nation and it appears Nigeria is the only country in the world that has a fuel subsidy regime in place.
“We have slated a conference for Tuesday and Wednesday, 2022 and we are going to assemble top class oil experts to speak on reasons fuel subsidy regime should be put to rest,” the group said.
Recall that the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had a few days ago disclosed to the Senate Committee on Finance that the Federal government would offer a N5,000 transportation grant to poor Nigerians to cushion the effect of fuel subsidy removal in 2022.
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