Category: Power

President Bola Tinubu is set to inaugurate three vital gas infrastructure projects carried out by the Nigerian National Petroleum Company Limited (NNPCL) and its partners.

This is contained in a statement by the President’s spokesperson, Ajuri Ngelale, on Friday in Abuja.

According to the statement, the projects will enhance the federal government’s initiative to increase the value derived from the nation’s gas assets and eliminate gas flaring.

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Ngelale pointed out that the delivery of the projects was expedited from the start of the administration, aligning with the overarching goal of enhancing domestic gas supply as a vital catalyst for economic prosperity.

“In line with his commitment to significantly leverage gas to grow the economy, President Bola Tinubu will commission three critical gas infrastructure projects being undertaken by the Nigerian National Petroleum Company Limited (NNPCL) and partners.
“The projects support the federal government’s effort to grow value from the nation’s gas assets while eliminating gas flaring.
“The delivery of the projects was accelerated from the inception of the administration in keeping with the overall objective of deepening domestic gas supply as a critical enabler for economic prosperity,” Ngelale noted.
The Projects to be Commissioned by the President
The projects lined up for commissioning include:

1. AHL Gas Processing Plant 2 (GPP – 2) – 200mmscf/dd:
This project is an expansion to the Kwale Gas Processing Plant (GPP – 1), which currently supplies about 130MMscf/d of gas to the domestic market. The processing plant is designed to process 200MMscf/d of rich gas and deliver lean gas through the OB3 Gas Pipeline.
This additional gas supply will support further rapid industrialization of Nigeria. The plant will also produce about 160,000 MTPA of Propane and 100,000 MTPA of Butane, which will reduce the dependency on LPG Imports.
The AHL Gas Plant is being developed by AHL Limited, an incorporated Joint Venture owned by NNPC Limited and SEEPCO.

2. ANOH Gas Processing Plant (AGPC) – 300MMscf/d:
The ANOH gas plant is an integrated 300MMscf/d capacity gas processing plant designed to process non-associated gas from the Assa North-Ohaji South field in Imo State.
The plant will produce dry gas, condensate, and LPG. The gas from ANOH gas plant will significantly increase the domestic gas supply, leading to increased power generation and accelerated industrialization.
The ANOH Gas Plant is being developed by ANOH Gas Processing Company, an incorporated Joint Venture owned by NNPC Limited and Seplat Energy Plc on a 50-50 basis.

3. ANOH-OB3 CTMS Gas Pipeline Project:
The project involves the engineering, procurement, and construction of 36”x23.3km ANOH-OB3 Project.
The Transmission Gas Pipeline will evacuate dry gas from the Assa North-Ohaji South (ANOH) primary treatment facility (PTF) to OB3 Custody Transfer Metering Station (CTMS) for delivery into the OB3 pipeline system.
About 600MMscf/d is estimated to be available from two separate 2 x 300MMscf/d capacity gas processing production trains from AGPC & SPDC JV.

Furthermore, Ngelale further stated that the projects will boost gas supply to the domestic market by about 500 million standard cubic feet per day, fostering a more favorable investment environment and cumulatively promoting balanced economic growth following their commissioning.

What you should know
Earlier in February, President Bola Tinubu signed new executive orders aimed at enhancing the investment environment and establishing Nigeria as the top choice for investments in the oil and gas industry across Africa.

The president issued this policy directive in Abuja’s extensive engagements with major stakeholders in the sector.
The directives entail the provision of financial incentives for the development of non-associated gas, midstream operations, and deepwater projects.
In addition, the initiative focused on optimizing the contracting process to decrease the cycle time to six months.

The Nigerian National Petroleum Company Limited (NNPCL) has warned the public against panic buying of the premium motor spirit (PMS), also known as petrol, stating that it has about 1.5 billion litres of the product which would be sufficient for 30 days’ supply.

This was disclosed in a statement by the company, noting that queues across fuel stations in the country have reduced significantly over the measures it has taken to address supply scarcity.

It stated, “
As the nationwide supply and distribution of Premium Motor Spirit (PMS), also known as petrol, continue to improve, the Nigerian National Petroleum Company (NNPC) Limited has once again called on motorists to shun panic buying of the product.”

“The Company wishes to state that at the moment, it has over 1.5 billion litres stock of PMS, which is equivalent to over 30 days sufficiency.”

The company further noted that it is collaborating with relevant agencies, the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), labour unions and security agents to address uncompetitive practices and hoarding by marketers and distributors.

“It stated,
“The NNPC Ltd. is also collaborating with relevant downstream agencies, such as the Nigeran Midstream & Downstream Petroleum Regulatory Authority (NMDPRA), labour unions in the sector and security operatives, to address hoarding and other unwholesome practices.”

Backstory
In the past week, Nigerians have had to queue for petrol due to shortages in the supply of the product, resulting in a significant increase in its pump price across the country.

Although the NNPCL stated that the scarcity would be over in three days, blaming the shortages on logistical and distribution issues. However, the scarcity has lingered on and resulted in a significant increase in transportation costs for members of the public.

Recommended reading: Nigeria to get 20000bdp oil from OML 85 oil platform – NNPC
What you should know
An investigation by Nairametrics revealed that petrol sold for over N700 per litre in Abuja, Lagos and Ogun states. In some places, the price of petrol was as high as N1500 per litre in the “black market” last week.

Furthermore, Nairametrics also reported significant increases in transportation costs following the scarcity and resultant hike in petrol prices. In some cases, the increase in transport fares was as high as 100% and on average there was a 50% increase in transport costs following the scarcity of petrol in Lagos.

Also, the scarcity in transport costs also brought to the fore the discussion on resumption in payment of subsidy for petrol after the removal in 2023. The CEO of Rain Oil, Mr Gabriel Ogbechie, had earlier stated that the Federal Government was spending around N600 billion monthly on fuel subsidy, mainly due to the significant depreciation of the naira.

The Nigerian National Petroleum Company Exploration and Production Limited (NNPC E&P Ltd.) and its partner, Natural Oilfield Services Ltd. (NOSL), have announced the commencement of crude oil production at Oil Mining Lease (OML) 13 in Akwa Ibom State.

The NNPCL disclosed this in a press statement signed by its Communications Officer, Olufemi Soneye, where it stated that oil production began in the location on the 6th of May 2024 with 6,000 barrels daily.

The company further said that daily oil production in OML 13 is expected to rise to 40,000 barrels per day by the 27th of May 2024.

It stated, “NNPC Exploration and Production Limited (NNPC E&P Ltd.), NNPC Ltd.’s flagship upstream subsidiary, and Natural Oilfield Services Ltd. (NOSL), a subsidiary of Sterling Oil Exploration & Energy Production Company Ltd. (SEEPCO), announce the successful commencement of oil production at Oil Mining Lease (OML) 13 in Akwa Ibom State, Nigeria.”

“The production, which commenced on the 6th of May 2024, with 6,000 barrels of oil, is expected to be ramped up to 40,000 barrels per day by May 27th, 2024.”

Increase in oil production
The company explained that the commencement of crude oil production in OML 13 signifies an intent to increase the volume of oil production in the country to meet local energy needs and propel economic growth.

The statement further read, “The achievement does not only signify the culmination of rigorous planning and execution by the teams involved but also represents a new era of economic empowerment and development opportunities for the host communities.”

“Furthermore, for Nigeria, the first oil from OML 13 holds some significance as it contributes to the country’s efforts to increase its oil production capacity, which is crucial for meeting domestic energy needs and driving economic growth.”

Regarding environmental and sustainability considerations, the NNPCL and its partner promised that its operations would be done in a safe and environmentally responsible manner beneficial to its host community.

What you should know
Production at the OML 13 conventional oil development project was earlier stated to commence in 2024, with peak output anticipated in 2029.

Under the current economic projections, it is expected that production will persist until the field reaches its economic limit in 2063, according to Global data.

Nigeria is desperate to increase oil production to meet local revenue expectations and generate needed foreign exchange (FX). In the first quarter of 2024, Nigeria barely met its OPEC production quota of 1.5 million bpd.

President Bola Tinubu has said that Nigeria’s plans to become industrialised, create jobs and achieve economic growth cannot be achieved if reliable energy is not generated, transmitted and distributed.

Tinubu said this at the groundbreaking ceremony of the Gwagwalada Independent Power Plant (GIPP) Project held in Abuja on Friday.

He reiterated that he had promised to prioritize energy availability and stability while using available energy resources to increase power generation beyond the current capacity and strengthen the integrity of the transmission infrastructure while distribution bottlenecks are removed.

“We cannot be productive without energy efficiency; To accelerate our economic growth, we must remove every obstacle on our way to progress,” he said.

In his address, Mele Kyari, GCEO, NNPCL said Nigeria has abundant gas resource which NNPCL as a commercial enterprise is leveraging to monetize the available resources by expanding access to energy to support economic growth, energy access, industrialization and job creation.

He described the project as a giant step towards achieving the NNPC’s goal of adding 5GW to the national power generation by 2024

He said currently NNPC and partners are delivering about 800MW to the national grid from Afam Vl and Okpai Phase thermal power plants with combined installed capacity of 1,100MW, adding that the Okpai Phase 2 project that will add up to 320MW of power to the national grid and progressing with other power plant projects across the country including those along the AKK pipeline route has been completed.

He added that the Gwagwalada IPP is among the NNPC flagship power projects along the AKK corridor which is part of the 3,600MW cumulative power capacity including Kaduna IPP (900MW) and Kano IPP (1,350MW).

The Gwagwalada IPP is among the NNPC flagship power projects along the AKK corridor. will be delivered in collaboration with General Electric as the as the Original Equipment Manufacturer (OEM) and China Machinery and Engineering Corporation (CMEC) as the Engineering, Procurement and Construction (EPC) Contractor.

He said this is part of the 3,600MW cumulative power capacity which includes Kaduna IPP (900MW) and Kano IPP (1,350MW)

“Our ambition is to create capital power plants across the country in small scale where transmission issues will not become a major concern; Expanding access to energy will change the game, It will create a better investment climate and promote balanced economic growth, a win-win situation for the Nation and for NNPC as a commercial company,” he said.

The project according to NNPCL was necessitated by the need to deliver gas towards achieving additional power generation capacity in Nigeria and make a substantial contribution to the positioning of gas as the preferred fuel for power.

The first phase of the project has a capacity of 350MW consisting of one gas turbine and one steam turbine

Situated on 54.7 hectares of land at Gwagwalada, Abuja, the project has a combined cycle of three power train blocks of 4500 megawatts (MW) each, Two gas turbines, Two heat recovery and steam generators, one steam turbine and can generate 10.3m MW per hour of electricity.

Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, has promised that the Port Harcourt refinery, located in Rivers State, Nigeria, will kick off production of fuel and other refinery activities before the end of the year.

In an exclusive interview with Arise Television’s “The Morning Show” on Thursday, Kyari said that the reason why the Port Harcourt refinery is behind schedule is because of disruptions in the global supply value chain that were created by the Russia-Ukraine war and are not peculiar to Nigeria.

“Of course there is work going on in the Warri refinery that is already in earnest. For the Kaduna refinery, that is a different situation, and we have awarded the turnaround maintenance for the Kaduna refinery, which is already in place,” he said about the other two federal government refineries.

Read also:Nigerians groan as NNPC, marketers raise petrol price

He admitted that with the Dangote Refinery, local refineries whose turnaround maintenance is nearing completion, and a couple of modular refineries, the country should be expecting a surplus of petroleum products by the end of next year.

“So ultimately, what this means is that we are going to have a surplus of product in the country by the end of next year,” he noted.

He reminded everyone of the projected contribution of the Dangote refinery once commercial production kicks off sometime in July or August.

“Once that happens, you would have a significant volume of PMS—once that happens, we fix our refineries and other modular refineries, and this country will be the hub of petroleum refineries on the continent and a reversal of market choice,” he said.

Earlier in the interview, the Group Managing Director debunked popular views, claiming that once the country starts a whole-scale domestic refinery of petroleum products, the price of fuel and others will come down drastically.

“There is this misconception that once you start to refine locally, the price is going to crash to half the price; that is not correct,” he said. “The distinction between domestic pricing and import pricing is simply two things.”

He listed two major instantaneous benefits outside of this price crash that will come to the country. According to Kyari, the security of the supply of products and businesses around refinery activities will improve.

He said, “First, it gives you security of supply—supply is by your door. You don’t need 14 days to move products from Europe into Nigeria. That goes away; you have access to this product because there’s no disruption in the supply chain. You have a short time to regulate and move around, so it gives you security of supply. This is the number one thing it does.

“Secondly, it creates a market around it for employment, taxes, and so many other benefits that will come to the country.”

He corrected another popular misconception around the pricing of refined petroleum products, saying that the prices of refined products, regardless of area of production, are determined by the international market.

“Therefore, at the gate of your refinery, you are pricing it as if you are getting it from Rotterdam or Amsterdam; that means the conversion of FX that determines the market value is determined by the international market,” he said.

“But there will be a delta; that delta is the cost of freight that builds up in your country. You will see a difference in price as a result of the freight difference,” he added.