+234-1-453-7796
info@equitypetroleum.com | | |

Nigeria’s hope of increasing gas supply for power generation suffers setback, yet again

source Emergy Mix Report on Jun 27, 2020

Nigeria’s hope of boosting gas supply for power generation has suffered a setback again as the completion date for Obiafu-Obrikom to Oben (OB3) gas pipeline project has been postponed again because of technical hitches, BusinessDay investigation has revealed.

The pipeline is meant to transport gas for power generation and other industrial developments in the country.

The likely date for the completion of the project is either December this year or the first quarter of 2021. The project was initially slated for completion in 2017, according to officials of the Nigerian National Petroleum Corporation (NNPC) and Nestoil.

At different stages, the project has experienced technical hitches which have consistently delayed efforts to transport stranded gas from the eastern part of the Niger Delta to the western part of the region where it is meant to serve mostly power plants that would use it to generating electricity.

Also, some investments that would have been made by other oil companies which are supposed to key into the pipeline for the evacuation of their gas has also been stalled. For instance, a company like Seplat had signed a final investment decision (FID) on a gas project in anticipation that its gas would be transported through the pipeline but this has not happened.

In the previous years the company handling the project, Nestoil Limited had blamed heavy floods experienced in the country in last years as being responsible for it not making much progress as it should have on the project.

The latest challenge for the completion of the project has to do with the crossing of River Niger.

Chukweluoka Umeh, executive director, Nestoil Limited told BusinessDay that it is the only company in Nigeria that has an “open hole underneath a 62-inch diameter horizontal directional drilling (HDD) hole, a span of 1.9 kilometres with the pipe going 40 meters below the water bed”.

He stated further that there are different layers of soil formations such as top sand, clay sand, hard sand, and small stones which have made it almost impossible for horizontal directional drilling (HDD) to take place.

To overcome this challenge, he said, a ‘Direct Pipe Facility’ is needed and there is no company in the country that has the facility.

He however told BusinessDay that with intervention by the Nigerian National Petroleum Corporation (NNPC) on the project, a company named HDD Thailand has been approached to work with Nestoil so that the pipeline can cross the bed of River Niger. The Thailand company will bring special equipment to do the job.

The gas pipeline project was awarded to two companies, Oilserv Limited and Nestoil Limited. While Oilserv has completed its own segment of the pipeline construction since last year Nestoil is still battling on how to get its own segment completed.

Nestoil officials often alleged that the terrain of their own slot of the project has been most difficult and blamed heavy floods experienced in the country as being responsible for it not making much progress as it should be.

The latest challenge for the completion of the project has to do with the crossing of River Niger. The company told BusinessDay that it is the only company in Nigeria that has an “open hole underneath a 62-inch diameter hole and 1.9 kilometre of 40 meter s below the sea bed.

He said there are different layers of soil formations such as top sand, clay sand, hard sand and small stones which has made almost impossible for Horizontal directional drilling (HDD)

To overcome this challenge a Direct Pipe Facility is therefore needed and there is no company in the country that has the facility.

This has led to the Nigerian National Petroleum Corporation (NNPC) intervention in the project and it has helped to bring a company named, HDD Thailand to work with Nestoil. The Thailand company will bring special equipment to do the job.

At the moment Nestoil and NNPC are trying to mobilise but this also has to depend on COVID-19 because the specialized equipment will be imported into the country.

 

Source: Business Day


More Insights
Nigeria needs a decade of gas utilization to transform sector – NLNG boss

The Managing Director of the Nigeria Liquefied Natural Gas (NLNG) Limited, Mr. Tony Attah, has said the declaration of 2020 as the ‘Year of Gas’ by the federal government was not sufficient to bring about the required transformation in the country through gas utilisation. He rather suggested that a decade should be dedicated to utilisation…

Nigeria to benefit from Chinese $15bn investment in oil and gas sector

Nigeria’s energy sector is about to receive a major boost from huge investment decisions from China, which is eyeing key exploration operations in the oil and gas sector in Africa. According to a Modern Diplomacy report, China has a whopping $15 billion worth of investments planned in Africa’s oil sector. This massive price tag is…

Nigeria cut oil production by 600,000 barrels daily – Minister

The Minister of State, Petroleum Resources, Timipre Sylva, on Monday, said Nigeria has cut its crude oil production level from over 2 million barrels a day to 1.4m barrels in compliance with the quota endorsed by the Organisation of Petroleum Exporting Countries (OPEC). Sylva said this at the Presidential Villa, Abuja, while fielding questions from…

‘Nigeria, others could face $20b loss in oil export revenue’ – Report

Nigeria and four other oil producers on the continent could each be facing $20billion or more in lost export revenue this year as global oil demand is estimated never to exceed 2019 levels, with energy markets having reached a tipping point, a new report showed yesterday. The PricewaterhouseCoopers’ (PwC) Africa Oil & Gas Review 2020,…

EPSNL Insights in a collation of Nigeria's oil and Gas Industry news and developments pulled together from various sources to enhance our site's user awareness...


Previous Insights
FG approves Ladol Free Zone’s 25 years land lease

The Federal government has affirmed the Presidential approval issued in 2018, granting Global Resource Management Limited a- 25 year lease covering the entire area of the Ladol Free Zone. Chief Ladi Jadesimi, Chairman of Ladol, who disclosed this in a statement yesterday, said the lease was valid and subsisting, adding that all stakeholders to comply…

Nine oil firms, DPR disagree over oil mining fields licences

Nine oil firms have opposed an application by the Department of Petroleum Resources (DPR) seeking approval to sell or accept bids for eight Marginal Oil Fields (Oil Mining Licences, OMLs). Justice Chukwujekwu Aneke had on June 3 restrained the Federal Government from tampering with the OMLs pending determination of a suit challenging their status. He…

European petrol margins boost hope for Nigerian crude exports

A sharp improvement to European gasoline cracks could soon lead to an uptick in demand for Nigerian crude, traders said, but differentials remained steady on high storage and mostly bad margins. * Increased mobility helped send European gasoline cracks higher and provided a boost to sellers of Nigerian oil. * Still, sold prices for lighter…