FG to Increase Output of Oil and Gas by 2020

The Nigerian National Petroleum Corporation, NNPC, said it is facilitating the growth of the midstream oil sector with a view to opening up other ancillary sectors that will help boost the industrial sector.

However, the Nigerian Petroleum Development Company, NPDC, is beginning to grow its natural gas production by 150 million cubic square feet per day in line with government aspiration.

In his key note address at the just concluded Oil and Gas Conference in Abuja, the managing director of the NNPC, Dr. Maikanti Baru, said, “Beyond growing gas for the power sector, there has been a strategic positioning of the sector to support massive gas-based industrialization,”. “We will incubate and midwife a portfolio of critical and mutually dependent investments – Central Processing Facilities, CPFs, Fertilizer, Petrochemical, Free Trade Zone, FTZ, infrastructure and Ports – which will jumpstart the gas revolution agenda. “NNPC intends to develop or take equity in some of these gas-based industries such as fertilizer and others.”

Also, he noted that the NPDC is strategically repositioning itself to see its production grows to 500,000 barrels per day by 2020. He expressed confidence that the country’s oil and gas sector has started to recover as barrel prices move closer to $60. Pipeline vandalism in the Niger Delta by militant groups – a major cause of the drop in exports that Nigeria saw last year is now becoming less frequent, he observed. “We are having a lot of engagements with people in our core area of operations in the Niger Delta and this is bringing a lot of hope. “If we go by the number of pipeline vandalism cases, they have dropped to an average of 20 per cent on a monthly basis as against a similar period last year. This is an indicator that calm is returning to the environment,” he added.

Nigeria Targets 10 per cent Global LNG Sales

Nigeria is set to capture at least 10 per cent of the global market share of Liquefied Natural Gas, LNG, as part of the concerted efforts to harness the nation’s gas resources which currently stand at 192 Trillion Cubic Feet, tcf, of proven reserve.  

NNPC Group Managing Director, Dr Maikanti Baru, who stated this while delivering a Keynote address at the 2017 Society of Petroleum Engineers, SPE, Oloibiri Lecture Series and Energy Forum, said the projection was in line with the gas component of the NNPC 12 Business Focus Areas termed the 12BUFAs initiative which seeks to increase domestic gas supply to 5bscfd by 2020.  

Providing details of the plan, the GMD said the initiative was anchored on: Growing gas supply to support the power sector, with a view to achieving at least a 3-fold increase in generating capacity within five years and stimulating gas-based industrialization with a view to positioning Nigeria as African regional hub for gas based industries such as Fertilizer, Petrochemicals, and Methanol etc.   

He said these steps would position Nigeria for self-sufficiency in these sectors and at least 5% of global output. 

The GMD explained that the gas component of the 12 BUFAs initiative would help to “selectively expand our export footprint in high value and strategic foreign markets, with a view to maintaining a 10% market share in global LNG trade and dominance in regional gas pipeline supplies.”

 On domestic gas utilization architecture, the GMD enthused that measures have since been activated to ensure that the industry responds adequately to the new wave of demand necessitated by the Power Sector massive investments in new power plants and rehabilitation of existing PHCN Power Plants which has increased total gas requirement to 3billion standard cubic feet of gas per day. 

“With Nigeria’s current production averaging at 8.0bscfd, of which 1.3bscfd is for domestic consumption, 3.5 bscfd for export, 2.5bscfd for re-injection/fuel gas use and about 0.7bscfd is flared, the need to encourage gas production to meet with the demand becomes paramount,’’ he said. 

The GMD listed the pipeline infrastructure intervention projects that have been completed to include: the Oben-Geregu (196km), Escravos-Warri-Oben (110km),

EmurenItoki (50km), Itoki-Olorunshogo (31km), Imo River-Alaoji (24km) and the Ukanafun-Calabar (128km).   

He said that other projects like the strategic East-West Obiafo/Obirikom to Oben (OB3) pipeline (127km) is scheduled for completion by the end of 2017 while the looping of the Escravos-Lagos Gas Pipeline System from Warri to Lagos is scheduled for completion by July 2017.   

“The Ajaokuta-Abuja-Kaduna-Kano pipeline (650km) is currently on tender. This project will soon be awarded under a contractor financing scheme.’’ 

Dr Baru said Nigeria was on the path of maximizing its gas resources, having put in place a commercially sustainable framework for gas supply, developed an aggressive gas infrastructure blueprint and articulated a gas based industrialization programme that is currently under way.  

This year’s SPE Oloibiri Lecture Series & Energy Forum has the theme: “Domestic Gas Utilization in Nigeria: From Producers to Users”. 

Saka Matemilola, Council Chariman of SPE, Nigeria, earlier in his opening remarks, called on oil and gas professionals to close ranks and ensure that the country reaps bountifully from its huge hydrocarbon resource base. 

www.nnpcgroup.com

US increases imports of Nigerian crude by 287%

The United States almost tripled the volume of crude oil bought from Nigeria last year, seven years after it began to depend less on the country’s crude as shale oil production surged, The Punch reports.

The latest data from the US Energy Information Administration on Friday showed that the country imported 76.9 million barrels of Nigerian oil in 2016, up from 19.9 million barrels in 2015. In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in the US imports of its crude from 87.4 million barrels in 2013 to a record low of 21.2 million barrels.

For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014, according to the EIA data. In 2010, the US bought as much as 358.9 million barrels from Nigeria, but slashed its imports to 280.1 million barrels and 148.5 million barrels in 2011 and 2012, respectively.

But the recent increase in the US imports of Nigerian crude is being threatened as shale oil production gathers fresh momentum on the back of the rally in global oil prices. The US shale production for March is expected to rise by the most in five months as energy companies ramp up drilling, with the EIA forecasting that production in seven major regions will rise by a total of 80,000 bpd to 4.87 million bpd.

FG instructs oil companies to relocate headquarters to Niger-Delta

Acting President, Prof. Yemi Osinbajo has directed the International Oil Companies operating in the Niger-Delta region to relocate their headquarters to their States of operation to mitigate tension in host communities, Vanguard reports.

Osinbajo, gave the directive at a Town Hall meeting in Uyo, Akwa Ibom State capital on Thursday during a continuation visit to the region to dialogue with stakeholders. The Acting President urged the Minister of State, Petroleum, Dr. Emmanuel Ibe Kachikwu to begin the process of engaging the International Oil Companies on the way forward to actualize the directive, saying “I think it is the right thing to do”.

He disclosed that, the Ministry of Petroleum is also working with major oil companies on several initiatives including; working on illegal refineries to establish modular refineries to achieve the desired result. On the Federal Government amnesty programme for ex-agitators, Osinbajo re-iterated the federal government’s stand noting that, the Ministry of Petroleum and Amnesty office are working with the state governments of the region on providing the benefits to young people in the states.

NLNG Predicts Demand Growth from China, India

The Nigeria Liquefied Natural Gas Limited (NLNG) has stated that with the current LNG demand growth from China, India, and some Asian markets, there would be a boost in LNG supplies in 2017.

The company said while the global LNG market experienced some very difficult periods in 2016 as a result of the dip in oil prices, some Asian markets were beginning to take up centre stages in LNG demand growth just as demand from European market could likely drop within the period.

The Managing Director of NLNG, Mr. Tony Attah, stated these during an interaction with journalists on the sidelines of the just concluded 2017 edition of the Nigeria Oil and Gas Conference and Exhibition (NOG) in Abuja.

Attah said in his assessment of the LNG market in 2016, as well as the operations of NLNG, that the market was down in 2016, but added that there was hope that there would be a better performance in 2017.

“People will think it was only oil price that was down, gas price was down as well but we are very excited at the recent development with the improvement in the market. We are also seeing some improvement upwards but we are also seeing improving demands in the India, China and some Asians are beginning to take centre stage again. We have to rely on Europe as the central point, which is the sink to receive in the phase of reduced demand. So, last year was tough year and it forced a lot of tightening but we will see more hope in 2017,” Attah explained.

He also spoke on a recent gas pipeline explosion that occurred within the precinct of the company’s operation in Rivers State, saying that the explosion had nothing to do with any of its gas pipelines or infrastructure.

“Let me first correct the impression that the explosion was on NLNG line. I read a few things from saying that NLNG pipeline exploded. No! The pipeline does not belong to us. The one that was impacted was not ours, but it is true that we also have a line in the same corridor but in this instance, it is not our line,” he clarified.

“But we are partnering with the company whose line was impacted, to ensure that we restore operations. We are not receiving gas from them at moment because of the situation but we are working to have them come back because if they are back we are sure to receive more supply to fill our trains one to six as you can expect,” he added.

Asked when the affected lines could come back on stream, as well as the likely financial impact the incident may have cost NLNG, Attah said it would expect the lines to be restored within the next one or two weeks. He then added that he would need to crosscheck if there were any financial impacts on NLNG from the explosion.

“I am not aware of anyone’s death as a result of the explosion. This line is in a very remote area, a minimum of two to four kilometers from habited location. It was quite an unfortunate incident for this company but it is certainly not an NLNG line. I must emphasise that to you,” he said.