Waiting for the 160,000bpd Amukpe-Escravos Pipeline Project

Oil theft in Nigeria has remained a major headache for both Nigeria and the producers especially in the onshore Niger Delta area. Of recent, government has been able to check some of the activities of militants in the region through peace talks. Despite the peace talks, there is need for alternative ppelines for crude oil export from the region.

The Amukpe-Escravos Pipeline Project (AEPP), a joint venture (JV) of the Nigerian National Petroleum Corporation (NNPC) and Pan Ocean Oil Corporation, is scheduled to come on stream before the end of third quarter of 2017. It is hoped that the pipeline project will offer an option to the “much troubled” Trans Forcados Pipeline (TFP) for crude export from mid-western oil producers in the Niger Delta.

“The primary objective of AEPP is to ensure that there is no disruption to crude oil export like the scenario we experienced on the TFP over the past 16 months where there was a total collapse crude export. Our experience and history has shown that you do not put all your eggs in one basket and that is why we have AEPP as alternative to TFP which has been our major means of exporting crude oil as a joint venture (JV) partner”, said John Okusolubo, Senior Pipeline Engineer and Project Lead, AEPP.

Operated and managed by the Pan Ocean JV and NNPC with its 60 percent stake, the AEPP involves the installation of 20-inch piggable export pipeline over 67km distance to transport crude oil from Pan Ocean’s Amukpe Metering Station to terminate inside the Chevron Nigeria’s Escravos Tank Farm for export.

According to Okusolubo, the construction of the AEPP entails the use of continuous Horizontal Directional Drilling (HDD) method to install the entire pipeline length for the purpose of security from the act of vandalism which is prevalent in the domain.

The project’s objective is to provide Pan Ocean JV and other Niger Delta mid-western producers like Seplat, Nigerian Petroleum Development Company (NPDC), Conoil, Sahara and other oil producers in the area an alternative export pipeline route to the existing TFP that has been a casualty of many militant attacks.

It will be recollected that the TFP, operated by Shell, was under force majeure since mid-February 2016 until May this year following persistent attack by Niger Delta militants. The first attack that stopped the flow of crude came in the line was in February 2016, followed by another in July. Repairs continued until October and the pipeline was restarted, only to be shut down before the month ended.

“It has not really helped us that for a long time TFP was the sole means of exporting our crude and when the pipeline had some difficulties, we had no option than to shut down production completely”, said Okusolubo.

Nigeria’s crude export capability dwindled in the past 2 years because of the massive vandalism. The TFP has a daily capacity of 240,000 bpd, with average daily flows ranging between 200,000 bpd and 240,000 bpd. Amid it’s shutdown, Nigeria’s crude oil production fell from 2 million bpd to as low as 1.27 million bpd, losing its position as Africa’s number one crude oil producer and falling behind Angola several times over the past year.

Another major export grade breached by the militants is the SPDC JV’s Trans Niger Pipeline, the export line for the Bonny light. Bonny Light is produced in Nigeria from Chevron and Shell concessions. Cargoes are loaded from the Shell-operated Bonny Light terminal can accommodate VLCCs.

The resumption of both Forcados oil terminal and Bonny Light exports would push Nigeria’s output to more than 2 million b/d.

“While AEPP is going to be our major export line, it also gives opportunity for other injectors in our environment who may also be stalled by the erratic vandalism of the TFP to join us to travel to Escravos together. Of course, the lease to potential injectors on tariff means more income to the Pan Ocean JV.

For us and for the industry, that is a great achievement. Now, Pan Ocean has an alternative line to export its crude and also created an opportunity for others who have been using TFP to also export their crude without disruption. This project will help the country to continue to flow their crude and keep the economy alive”, Okusolubo added.

Nigeria is producing less than 2 million bpd of oil currently but with the restart of TFP after a 16-month halt, it is expected that the terminal will resume shipping about 240,000 bpd. The nation’s crude oil export is also projected to exceed 2 million bpd on 67 cargoes already scheduled for August, with an additional 97,000 bpd coming from Akpo condensate according to shipping data.

FRANK UZUEGBUNAM