Natural Gas Liquid production hit over 1.1 million metric tonnes in 2014

According to NNPC’s latest released monthly petroleum information, Natural Gas Liquid (NGL) production reached 1.1 million metric tonnes as at September 2014, with ExxonMobil Nigeria accounting for 51 percent while NNPC was responsible for the remaining 49 percent.

The NNPC annual statistical bulletin shows that two major companies, namely, ExxonMobil Nigeria (Mobil Producing Nigeria) and NNPC, are responsible for the production of NGL in Nigeria.  Apart from ExxonMobil NGL II Plant, MPN also produces 45 kbd of NGL at the OSO NGL platform under a separate agreement, where it holds a 51 percent interest in partnership with the NNPC.

Both ExxonMobil and NNPC started the year 2014 with the total production of 98,591 MT of NGL. The breakdown shows that ExxonMobil and NNPC produced 50,281 MT and 48,310 MT of NGL, respectively, in January 2014. By February 2014, the two companies grew NGL production by 20 percent to 118,096 MT.

In March 2014, both companies recorded a decline in production. ExxonMobil’s NGL production declined by 2 percent to 59,067 MT in March from 60,228 MT in February. Similarly, NNPC’s production within the same period fell by 2 percent to 56,752 MT, from the earlier 57,868 MT.

As at April of the same year, total production fell by 4 percent to 111,723 MT, from 115,819 MT in March. However, ExxonMobil accounted for 51 percent of the April NGL production.

In the month of May, production rose by 26 percent to 140,780 MT, with ExxonMobil producing 71,798 MT and NNPC producing 68,982 MT. This continued in the month of June as both ExxonMobil and NNPC maintained the same level of production.

In July, NGL production made a u-turn as it declined by 23 percent. ExxonMobil saw its production falling from 71,798 MT in June to 56,146 MT in July, while NNPC’s production fell to 53,944 MT in July 2014, from 68,982 MT in June.

NGL production continued its up-and-down swing through the month of the August and September 2014. It reached 120,682 MT in August, indicating an increase when compared with July production, but eventually fell to 100,027 MT in September.

Historically, the peak production of NGL was recorded in 2009 with the production of 1.3 million MT as shown by NNPC annual statistical bulletin, while the least production of 995,564 MT was recorded in 2012.

NGL lifting

On the average, 95 percent of the natural gas liquids produced was lifted by ExxonMobil and NNPC in the first nine months of 2014. In January 2014, a total of 96,511 MT or 98 percent was lifted by ExxonMobil and NNPC, out of 98,591 MT of NGL produced during the month.

In the month of February, a total of 109,209 MT or 92 percent of NGL produced was lifted by ExxonMobil and NNPC, with ExxonMobil lifting 69,536 MT and NNPC 39,673 MT.

However, in the month of March 2014, a total of 119,364 MT was lifted for export, which is more than 115,819 MT produced during the month. The difference between NGL produced and lifted during the month was accounted by opening stocks for the month.

Cases of NGL lifted being more than NGL produced occurred three months during the period under review; in March, August and September.

In the month of April, NGL lifted fell by 9 percent to 108,836 mt from 119,364 mt in the month of March. This also indicates that 97 percent of the NGL produced was lifted for the month.

Like production, NGL lifted in the month of May and June is the same as revealed by the NNPC monthly petroleum information. A total of 132,224 mt was lifted respectively in both months which represent 94 percent of GNL produced during the months.

The least NGL lifted in the year was recorded in the month of July. A total of 85,222 mt was lifted in the month; this represents 77 percent of the NGL produced during the month. For the month of August, NGL lifted increase by 44 percent to 122,803 mt from 85,222 mt in July.

In the month of September, a total of 147,877 mt of NGL was lifted by ExxonMobil and NNPC. This represents the highest NGL lifted for export during the period under review. NNPC lifted 76,006 mt for export while ExxonMobil lifted 71,871 mt.

The Value of NGL

In first nine months of 2014, Nigeria earned about $161.82 million (about N33.7 billion) from lifting of 1,054,268 mt (7,727,784 barrels) of natural gas liquid. The price of NGL in the international market is about $20.94 per barrel.

The largest earnings from NGL lifting were recorded in the month of September where NNPC and ExxonMobil recorded highest lifting of 147,877 mt (1,083,938 barrels). With the current international price of NGL, the country earned the sum of $23 million (about N5 billion).

Focus on NGL

Natural Gas Liquid (NGL) production is increasingly getting more attention in Nigeria in recent times, just as in the United States of America. The last six years have seen an average annual production of 1.2 million metric tonnes (8,871,301 barrels) of the product, according to data obtained from the Nigerian National Petroleum Corporation (NNPC) annual statistical bulletin.

Natural gas liquids, which include ethane, propane, butane, isobutane and natural gasoline, are separated out from crude oil and natural gas. They are known as the fuels in propane grills and butane lighters and are used as feedstocks to make plastics and chemicals. NGLs are also used as inputs for petrochemical plants, burned for space heat and cooking, and blended into vehicle fuel.

Global Natural Gas Liquids (NGL) production is forecast to grow by net 3.3 mb/d from 2008 to 2015, with 2.9 mb/d of the growth coming from OPEC and 0.4 mb/d from non‐OPEC countries. Global incremental NGL production therefore represents a substantial contribution to total global liquids growth. According to the last medium term market update in December 2009, net additions of 3.1mb/d of NGLs make up 60% of total liquids growth from 2008 to 2014, where OPEC crude capacity grows by 2.3 mb/d, non‐conventional non‐OPEC liquids grow by 1.4 mb/d and non‐OPEC conventional crude decline by 1.4 mb/d.

Most of the NGL growth stems from OPEC countries, notably Qatar, Iran, Saudi Arabia the UAE and Nigeria. Outside of OPEC, Russia and Kazakhstan will also see strong growth.

The level of expected growth in NGL supply has important implications for the global oil refining sector, since NGLs from gas processing plants will potentially displace refinery‐sourced LPG or naphtha, while rising condensate supply will impact upon the quality of the refinery crude feedstock slate. Condensates can be spiked into a crude oil stream, effectively lightening and sweetening crude supply and they also have an important application in acting as a diluent for heavy, viscous bitumen and heavy oil export streams.

OLOWA PETER