Trans-Forcados pipeline may not be back in operation till June
Minister of State for Petroleum, Ibe Kachikwu, Wednesday said the Trans-Forcados pipeline might not be back in operation till sometime in June this year.
Nigeria currently loses about 250,000 barrels of crude oil per day due to the bombing of Forcados pipeline that conveys Forcados grade of crude oil to the over 400,000 barrels per day Forcados Export Terminal, one of the country’s biggest export terminals in the Western Niger Delta.
The loss, which translates to an average of $12 million daily at an oil price of $40 per barrel, arose from the damage caused on the 48-inch underwater pipeline, which disrupted crude oil flows to the export terminal. This may be eroding Nigeria’s gain from the recent increase in crude price.
The affected Trans-Forcados pipeline, which is operated by Shell Petroleum Development Company of Nigeria Limited (SPDC), belongs to the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
Responding to a question on the earlier set deadline for the resumption of operations set for May, Kachikwu said: “I think that the more realistic time would be definitely before the end of June
“In the interim, what we are doing is to see whether a good intervention relationship between Shell, Seplat and Chevron using an alternative route that can evacuate some of the products Seplat has in their system and SPDC has and that will force production which will therefore bring out the associated gas. So, we are looking at that. And that may come a lot more closer to May than June.”
He said since this was not the first time this was happening, the NNPC was now considering other routes since this was blocking production of crude and gas.
“This is not the first time this is happening, we must find a way of having a good secondary line, whether through Shell or through Chevron so that if this happens we can detour because this is blocking down production in terms of crude and gas” he said.
According to him, gas production is the responsibility of ministry of petroleum but the protection of the instrumentality of gas is the responsibility of every Nigerian.
“We have continued to provide enough gas to uplift to about 5,000 megawatt the highest number we have had in this country since 1960. And there was sabotage on the Focados line and that is not the responsibility of the ministry of petroleum, the line won’t be ready until June. We are also looking at the intermediary structures that will help us come back online with some gas, maybe not 100 per cent gas replacement but certainly with substantial portion of gas. So we are doing everything to correct something that was wrongly done but until Nigerians begin to protect their own assets be it pipelines, we will find it difficult to meet some of the targets that we set”.
A repair plan had been presented to Vice President Yemi Osinbajo by Shell, at the weekend, indicating that the repair work which is in three phases is about concluding its first phase with expectation that the repair would be concluded in May-next month.
Kachikwu also said he briefed FEC on the update on the petroleum distribution position and the whole fuel queues crisis adding that as part of efforts made, the product has been purchased in excess to flood the market.
“But what we have tried to do in the last one month is to try and flood the market with product, we are in the position to say between now and October, we have cargo in excess of what we should need, so we have addressed the supply issue.
“Last week we had about 11 cargoes in, this week we had about 10 cargoes in. For the month of April collectively we had 38 cargoes, is the first in the history of this country.
“We are hoping that by July we will be able to sign up agreements that will enable upgrades and joint venture of the refineries to take effect. We expect that to last for about 12 months” he said adding that the government expects that by 2017 all the refineries would be up and working.
“The target is that by 2018 we will reduce fuel import by 60 per cent and by 2019 with our refineries producing 400,000 barrels, we will exceed our refined importation and begin to export petroleum products”.
Also at the briefing, Minister of Power, Works and Housing, Babatunde Fashola while speaking on the present power outages in the country explained that the problem is hinged on the gas supply as well as the on-going repairs on the damaged Focados Export pipelines in Delta State.
He explained that as a result of the damage, power production has dropped from 5,000 megawatt to about 3,000 megawatt depending on other collateral problems.
“We understand that people are going through a difficult time, is a bad time to have energy crisis and there is no good time to have one. But like we briefed council, it is temporary thing, we will go back to normal service when gas is fully restored”, Fashola said
He disclosed that the government was working to ensure that such situations would better be addressed by increasing the opportunities for local gas allocation and local gas production from the non-associated lines.
He expressed confidence in government’s ability to meet the target of 10,000 megawatts set by the President by 2019.