The recent bombing of gas pipelines belonging to Nigeria National Petroleum Corporation (NNPC) and International Oil Companies (IOCs) has made it almost impossible for indigenous producers to supply gas to power plants as well as for export.
A gas processing plant
The recent bombing of gas pipelines belonging to Nigeria National Petroleum Corporation (NNPC) and International Oil Companies (IOCs) has made it almost impossible for indigenous producers to supply gas to power plants as well as for export.
In less than three weeks, Nigeria’s power sector lost over N36 billion, primarily as a result of gas shortage caused by the bombing of pipelines supplying gas to electricity generation plants.
According to operators, between May 27 and June 13, 2016, the country’s power sector lost an average of N2 billion daily as a result of different challenges, with gas accounting for over 85 per cent of the total constraints.
Despite these attacks on gas facilities in the country, there are several projects, which are either awaiting the final investment decision or at the final stage of completion.
Indigenous gas producers have also been trying to contribute to the development of the Nigerian gas sector, but their efforts are now been hindered by the activities of pipeline vandals.
Some indigenous companies, which have invested so much in gas to power projects are the Uquo gas project owned by Seven Energy and Frontier Oil; the East Horizon Gas Company (EHGC), a subsidiary of Oando Plc, is a special purpose vehicle set up to develop, finance, construct and operate a gas transmission pipeline linking the Calabar Cluster of Industries to the Nigerian Gas Company (NGC) grid in Akwa Ibom state is another example. There is also the Seplat Petroleum 90m-scf-per-day Oben gas plant on OML 4.
Specifically, an independent gas producer, Pan Ocean’s Ovade-Ogharefe gas processing facility – one of the largest carbon emission reduction project in sub-Saharan Africa is located in oil mining lease (OML) 98.
According to the Chairman, Pan Ocean, Festus Fadeyi, the project boosts government’s efforts to ensure zero routine flaring in exploitation of oil.“Our gas supply to the national electricity grid is a modest accomplishment which we are proud of and we also recognise the support of our joint venture partner, the NNPC whose support and co-operation made these achievements possible”, Fadeyi said.
Militancy and pipeline vandalism is another major threats though the company, which engaged over 22 host communities from Ovade-Oghaefe down to Escravos in dialogue to provide surveillance on its pipelines.
The company said that there is also a memorandum of understanding signed with the host communities, which ensures that Pan Ocean sustains its community empowerment principles by providing competent and experienced local community people with contracts for execution of certain aspects of the project as well as the supply of material that are locally available.
According to the company, it reserves unskilled labour jobs for the community people especially the youth as a means of empowering them economically. “The Ovade communities have been very supportive of the projects and cooperating with Pan Ocean in ensuring a safe environment and easy access to project sites.
“In addition, Pan Ocean deployed new technology to bury the pipelines deeper, so as to make them inaccessible to vandals, to forestall future breach. “Pan Ocean has operated in Nigeria since 1973. It is home grown and employs 99 percent Nigerians and for over a decade was the only indigenous company in the prestigious joint venture club with NNPC. Pan Ocean typifies success of Nigerian enterprise and Nigerian content and more should be replicated especially given the challenges the company has surmounted. This is great for Nigeria
“The construction of Ovade-Ogharefe Gas Processing Plant started in 2007 and was designed as a carbon emission reduction project with the capacity of delivering 200 million standard cubic feet per day (mmscf/d) of dry gas to the domestic gas market especially for power generation and industrial development”, it added.
Seven Energy, is another example of indigenous leadership in Nigeria’s oil & gas sector. The company has been severally recognized for its commitment to sustainable power supply in Nigeria through efficient gas delivery.
Speaking recently on the company’s operations, Seven Energy Chief Executive Officer, Phillip Ihenacho, said, “We are pleased that our effort in providing the much needed gas for sustainable power supply and for use by industries to drive economic growth is being recognised. We remain fully committed to delivering on the vision that sees Nigeria powered by its own gas resources”.He added that in less than 10 years of operations, the company has emerged as the leading integrated gas company in south east Nigeria.