Power generation to soar as Total E&P deploys 300mscf of gas to domestic market
Total E&P has taken a giant step that will help alleviate the problems confronting both the power and industrial sectors of the Nigerian economy as it pushes out about 300 million scf/day of gas to the domestic market. In this write-up, Olusola Bello examines the implications of the company’s action on the Nigerian economy.
Power supply in Nigeria is set to get a boost as Total Exploration and Production Nigeria Limited (TEPNG) has committed about 300 million standard cubic feet (mscf) of gas daily to domestic market.
The gas production is the result of the huge investment, about $5.7 billion in the upgrade of the Oil Mining Lease (OML 58) facilities, which is meant to boost both the production level of the oil fields both in terms of crude oil and gas.
This action is also a major step towards reducing gas flaring, and a boost to the national economy because of its multiplier effects on the industrial sector and employment.
It is very exciting to note that about 300mscf of gas per day, which is part of what is being produce through the upgrade, is devoted to the domestic market these days when international oil companies are very reluctant to invest in gas projects for domestic market because of lack of favourable gas price.
This is a great boost to the Federal Government gas-to-power policy, as part of the gas is to be channelled towards power generation with the construction of the Northern Option Pipeline (NOPL), which would deliver 100mscf/d of gas to Alaoji Power Plant. The pipeline network transverses 76 communities, from Rumuji in Rivers State to the treatment plant in Owaza area of Imo River in Abia State.
The NOPL takes gas from the 42-inch 45km OUR pipeline at Rumuji through Obidigbo to treatment plant at Owaza through a total of 50 kilometres, where the gas feeds into the facility of the Nigerian Gas Company (NGC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
The 24-inch NOPL is a $900 million project, which will also supply feedstock to Alaoji Power Plant, Indorama and a fertiliser plant as well as impact industries in Aba and environs via a gas delivery by the NGC.
Total is the operator of the NNPC/Total joint venture handling the OML 58 upgrade projects.
Nicolas Terraz, managing director, Total E&P, told journalists during a recent facility tour of the projects that $5.5 billion had already been spent, and listed the projects that comprise the OML 58 upgrade. These, he said, are Ogbogu Flow station (OPS); Field Logistics Base (FLB); Obite Treatment Centre (OTC); Obite, Ubeta, Rumuji (OUR) pipeline and the Northern Option Pipeline (NOPL).
Terraz said the OML 58 upgrade projects were essentially designed to boost gas supply for both industrial and domestic use, and increase deliveries to the Nigeria Liquefied Natural Gas (NLNG) in Bonny Island.
The Total boss revealed that the upgrade of the 50-year old Ogbogu Flow Station oil treatment plant to increase production and improve safety, was a major challenge for the project team, adding that with the discovery of a network of underground pipes, the teams had a major obstacle to investigate the entire underground of flow station and finalise the designs.
The investment, he said, was a demonstration of his company’s support for the Federal Government’s aspiration on gas utilisation and improvement in power supply.
The project, which will be completed in July this year, also demonstrates Total’s commitment to and compliance with the Nigerian Content Law, as over 84 percent of project team are Nigerians.
The excited Total boss also spoke on the company’s OUR pipeline, which he described as a 42-inch gas pipeline, extending 45 kilometres from Obite via Ubeta to Rumuji in Rivers State. With the acquisition of 120 hectares of land to lay out the Right of Way, the pipeline crosses 20 different communities, Terraz said.
Terraz also said the Field Logistics Base was also an interesting project, as it was modified from a four-storey building to a 10-storey building with addition of new floors, as there was also the modification of all the internal systems. According to Terraz, a new flare has been erected at the company’s Obite Treatment Centre to reduce gas flaring, adding that a new train has also been installed to raise capacity.
One other interesting thing he torched on was that the Total’s $16 billion FPSO for Egina Field, expected to arrive Nigeria April 2017.
The 200,000 barrels per day capacity Floating Production Storage Offloading (FPSO) vessel is being built by Samsung Heavy Industries of Korea at a cost of $3.3 billion, while the entire Egina Field development project, including the FPSO, will cost $16 billion.
Throwing more light on this deepwater project during a the tour of the facilities in Port Harcourt, Rivers State, Ahamadu-Kida Musa, deputy managing director, Total E&P in charge of deepwater, said the company’s target was to produce 200,000 barrels per day of crude oil from the Egina by 2018.
According to Musa, the development of Egina by Total and the NNPC at a critical time most other companies were not willing to invest was a demonstration of Total’s boldness.
He said for Total to embark on such $16 billion project when other companies were not willing showed the company was confident in Nigeria’s operating environment.
The Egina projects are about 54 percent completed with 11 well drilled – seven oil producing wells and four water injection wells, he said.
The deputy managing director also revealed that a lot of the fabrication work for Egina field, located in several kilometres into the waters, had been completed by Saipem, Nestoil, Nigerdock, Dorman Long and Aveon.
Egina is the next field on development phase. It was discovered in 2003, with FID taken in 2013. It is in the same environment with Akpo in the same Oil Mining Lease (OML) 130.
For Total to endorse $16 billion project when nobody was willing to invest shows the company’s boldness. The company committed hundreds of millions of dollars without guarantee.
Egina FPSO is one of the largest in the world. Sometime in March or April 2017, the Apapa Wharf will be blocked and the FPSO will come into the country, he said.
On the Nigerian Content scope of the Egina project, he said the project was caught up with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, adding that in spite of the mounting challenges, it had fully complied with the Act, as 70 percent of the project was local content.
On the Akpo deepwater field, which is currently producing 145,000 barrels per day from OML 130, he said it had achieved some milestones.
Olusola Bello