NNPC, Joint Venture Partners Endorse 40 Tcf Gas Deal

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Federal government and her traditional partners in oil and gas exploration and production joint venture (JV) have reached agreement to develop some 40 trillion cubic feet (40 Tcf) natural gas reserves from brownfield assets onshore Niger Delta.

Planned development campaign expected in some 13 producing assets in the region is projected to unleash about 3.4 billion standard cubic feet (3.4 Bscfd) of gas per day into the domestic supply system in preparation for envisaged demand boost in the market.

According to details of collaborative terms signed by the partners for delivery of the seven Critical Gas Development Projects (7CGDP) evolved by the Nigerian National Petroleum Corporation (NNPC) in Lagos Monday, the new gas development is “to bridge the foreseen medium term supply gap by 2020 on an accelerated basis.”

The agreement covers terms for development and production of the 6.4 trillion cubic feet of gas reserves from unitized gas fields, including Samabri-Bisseni, Akri-Oguta, Ubie-Oshi fields operated by Shell and Nigeria Agip Oil Company (NAOC) under JV alliance with NNPC.

The agreement also includes development of the 4.3 Tcf Assa North/Ohaji South field; development of Afuo-Ogbainbri and the development of 7.0 Tcf reserves hosted in Oil Mining Lease (OML) acreages 26, 30 and 42 operated by the Nigerian Petroleum Development Company (NPDC), the exploration and production arm of NNPC.

Others include development of 2.2 Tcf gas supply to Brass Fertilizer Company by Shell operated JV with NPC; cluster development of 5.0 Tcf on OML 13 to support the expansion of Seven Energy’s Uquo Gas Plant; and the cluster development of 10.0 Tcf Okpokunou/Tuomo West field in OMLs 35 and 62.

The Oracle Today reports that the 7CGDP is part of the gas development strategy of government to meet gas demand for generating about 15,000 megawatts of electricity by 2020.

Group Managing Director of NNPC, Dr. Maikanti Baru, stated that the projects would not only bridge the projected shortfall in supply upon completion, but also begin the closing demand-supply gap in the domestic gas market.

He said NNPC has engaged DeltaAfrik/Worley Parson and Crestech/Penspen consortia as project management Consultants namely to work with the operators and other stakeholders to achieve the project targets.

He said the consultants would work with NNPC and partners to revalidate and carry out relevant technical studies to proposed development plans, provide financial advisory services for project funding/financing strategy and appraise the fiscal requirements for viability and advice on interventions that may be required.

The consultants are also to study and recommend fast-track tendering process for field development and project implementation, establish realistic cost benchmarks for identified projects and develop project schedules and cost estimates for the respective projects.

They are also to strengthen oversight function on the gas development projects by ensuring prompt decision making and timely approvals in line with international best practices.

Dr. Baru said NNPC was working closely with other agencies like the Department of Petroleum Resources (DPR) and the Nigerian Content Monitoring and Development Board (NCMDB) to ensure timely approvals for the project and also ensure that lease renewals requests related to these projects were supported for renewals by relevant agencies.

Managing Director of Shell Petroleum Development Company (SPDC), Mr. Osagie Okunbor, whose company is handling three out of the seven projects, pledged the commitment of the company to the successful execution of the 7CGDP, noting that Shell was fully aligned with Nigeria’s gas strategy and aspirations.

 




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