In spite of the drive to increase local participation in the Nigerian oil and gas industry, only one per cent of the 3.5 billion cubic feet per day natural gas (feedgas) required for liquefaction at the NLNG Bonny Island’s plant is supplied by an indigenous operator.
With six trains in full operation, the total gas requirement of the NLNG’s Bonny Island natural gas liquefaction plant is about 3500 MMscf/d (3.5 Bcf/d), according to the Facts $ Figures on NLNG 2013 report.
The report said, “The NLNG six-train complex is the biggest gas consumer/exporter in Nigeria with its current daily consumption of 3.5Bcf/d, equal to the total consumption of an industrialised country like the Netherlands.”
The report further stated that the NLNG Limited had signed a long-term Gas Supply Agreements with three Joint Ventures for the supply of natural gas (feedgas) to the plant.
The JVs, according to the report, are Shell Petroleum Development Company of Nigeria Limited, Elf Petroleum (Nigeria) Limited now Total Exploration Production Nigeria and Nigerian Agip Oil Company Limited.
Following a special supply arrangement with SPDC in November 2012, however, Niger Delta Petroleum Resources, an indigenous operator had started supplying 35 million standard cubic feet per day of natural gas.
NLNG said the development had the potential to increase to 100mmcf/d
“Under a special supply arrangement with the SPDC-JV, an indigenous marginal field concessionaire /operator – Niger Delta Petroleum Resources commenced natural gas supply to NLNG in November 2012 from its Ogbelle – Obumeze oil and gas process facilities. At 35mmcf/d, it currently supplies 1% of NLNG daily feedstock with potential to grow to 100mmscf/d,” the report said.
According to NLNG, feedgas is produced by the JVs from various concession areas in the Niger Delta, from on-and-off-shore fields. The agreements ensure efficient gas supply to the plant throughout the life of the projects.
While NDPR explores gas from its marginal field and supplies NLNG, the Director, Department of Petroleum Resources, Mr. Osten Olorunshola, had lamented that only nine out of the 30 marginal fields awarded in 2003 had been brought on stream by their operators.
He noted that technical partnership, which had dragged many fields into litigation rather than production, was being tackled.
He said, “We are looking at how to address this issue which has made it difficult for most fields to come on stream. Rather than putting up development programme for production, most of them are busy fighting one another in law court. Majority are now at Ikeja High Court bringing litigations against one another.
“We think that most of these operators and their technical partners are nothing but strange bed fellows. Their marriages are what can be described as marriage of convenience. So, we believe before they come to us at all, they should go and marry themselves first.”