Oando, NAOC, Shell, others partner NNPC to unlock 3bcf of gas by 2020
Oando PLC, Nigeria Agip Oil Company (NAOC), Shell Petroleum Development Company (SPDC), other indigenous and international oil companies in partnership with the Nigerian National Petroleum Corporation (NNPC) achieved a commendable feat with the signing of an agreement to implement Gas Projects worth $3.7 billion. The gas projects tagged ‘Seven Critical Gas Development Projects (7CGDP)’ is set to bridge the gas supply shortfall in the country.
The 7CGDP is an integral part of the gas development strategy designed by the NNPC to leverage the full potential of gas to meet the target of generating at least 15 gigawatts (GW) of electricity by 2020. The agreement includes the development of the 4.3 trillion cubic feet (TCF) Assa North/Ohaji South field, the development of the 6.4 TCF Unitized Gas fields (Samabri-Biseni, Akri-Oguta, Ubie-Oshi and Afuo-Ogbainbri) and the development of 7 TCF Nigerian Petroleum Development Corporation’s (NPDC) OMLs 26, 30 and 42.
Speaking at the event, Ainojie Irune, the Chief Operating Officer, Oando Energy Resources said; “The company’s focus was to ensure that indigenous companies play an integral role in creating the new Nigeria; a Nigeria where as a result of our combined efforts we are driving industrialisation, driving the commercial use of gas, and ultimately creating and enhancing value for the nation. The NAOC Joint Venture (JV) of which Oando is a part of will be responsible for unlocking almost 50% of the 42 trillion cubic feet that the 7-Critical Gas Development Projects aims to deliver by 2020. We all know that oil is a key contributor to the economy, but we must also understand the extremely important role that gas has to play. When you have a developing country like Nigeria, gas plays a critical role in moving it from where it is today to a first world country. Diesel is currently what most of our manufacturing companies use; the utilization of gas will lead to cost reduction and most importantly, it will directly impact country’s Gross Domestic Product (GDP).”
The ‘Seven Critical Gas Development Projects’ are in line with the Government’s efforts to harness the country’s vast gas reserves to reposition Nigeria as a gas based economy and includes five projects by the NNPC joint venture and two projects by the NPDC. The projects will enable a boost of about 3.4billion standard cubic feet of gas per day to bridge the projected medium term supply gap.
This is not Oando’s first foray into gas, through their midstream subsidiary Axxela, the company has recorded many firsts and successes. Oando was the first private company to enter gas distribution in Nigeria and pioneered gas distribution in the Greater Lagos area with the aim of spurring industrialization. Other notable gas projects under the company’s name include the development of circa 260km gas pipeline grid across Nigeria, Alausa and Akute Independent Power Plants and a Compressed Natural Gas Plant. These gas infrastructures offer clean and affordable energy solutions, which equate to significant cost advantages for industries across the country.
In a presentation at the event, the Group Managing Director of the NNPC, Maikanti Baru, enthused that the projects would not only bridge the projected shortfall in supply upon completion, but would also signal the beginning of the process of closing the demand-supply gap in the domestic gas market.
The GMD further explained that domestic gas demand was growing at an exponential rate, one that outpaces the current gas supply development plan. He said “A gap of about 3 billion cubic feet per day (bcfd) of gas by 2020 has been identified by the NNPC and this will be bridged on the completion of the 7CGDP.” He further said the NNPC has engaged two world-class project management consultants DelaAfrik/ Worley Parson and Crestech/Penspen who will work with the NNPC JV partners and other stakeholders to achieve set project deliverables.
Also at the event, was Roland Ewubare, the Group General Manager of National Petroleum Investment Management Services (NAPIMS) who said “About 41 trillion cubic feet of domestic gas was yet to be unlocked in the country.” Ewubare urged stakeholders to unlock the significant value of domestic gas lying down untapped. “It is important to unlock the domestic gas volume needed by industries and which is abundantly available in Nigeria. The objective of the workshop is to identify commercial, legal and other impediments towards the execution of these projects and propose mitigations. It is also to reaffirm co-operation and support of stakeholders for the projects and develop a master schedule to achieve first gas targets.’’
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