Liquefied Petroleum Gas Prices To Drop With New Plants

 

The Nigerian National Petroleum Company Limited NNPCL, says Liquefied Petroleum Gas, LGP price will reduce with the commissioning of three gas power plants, leading to increased supply of the product in the Nigerian market.

The Executive Vice President of Gas, Power and New Energy NNPCL, Mr Olalekan Ogunleye said this in Kwale Delta State during a facility inspection tour of the NNPCL delegation to the AHL GPP2 Kwale and the ANOH Gas plant situated in Assa North-Ohaji South field in Imo State.

Ogunleye said; “cumulatively the AHL Gas Processing Plant GPP2, an expansion to the Kwale Gas and the ANOH Gas would both deliver an incremental 25% of gas into the domestic market.”

He noted that despite the OB3 pipelines not being included in the projects slated for commissioning by the President, presently more than 113 kilometres out of its total 130 kilometres are already operational.

He further said that upon the commissioning of these plants, an additional daily volume of 220 million standard cubic meters would flow into the Nigerian gas system.

Ogunleye further stated that “the currently generated gas will serve for both electricity generation and industrial needs thereby offering opportunities to the Nigerian populace.”

He emphasised that initiatives such as this challenge the perception that Nigeria lacks investment prospects, stressing that the success of the NNPCL partnership with Sterling Oil, Seplat and ANOH Gas invites observers to witness the progress firsthand.

Ogunleye stated that the upcoming focus of the NNPCL on gas expansion is on the GPP3 project, with the initial phase targeting a capacity of 300 million standard cubic meters.

Fundamental Key Points

Speaking on the essence of the visit, Ogunleye stated that the inspection visit was to deliver on the support and existing collaboration of the NNPCL to its partners.

“Three fundamental key points to note are; GPP2 will not just deliver 200mmscf of gas, it has been configured to go above that and will deliver 220MMscf. It is important to note that as we speak ahead of the Presidential commissioning the plant is delivering gas into the OB3. This is important, it is not notional and it is real.

“As we speak notwithstanding that the OB3 pipelines are not on the list of projects to be commissioned by the President over 113 out of the 130 kilometres are already in use and with the commissioning of these plants incremental volume of 220msc per day will enter into that system.

“The third thing is that the key aspect of this relationship is the emphasis and focus on delivery, this is consistent with the mandate of the President Of Fed Rep of Nigeria and it is also the new mantra of NNPCL and this is the NNPCL of getting it done,” Ogunleye explained.

He said that “the Nigerian National Petroleum Company Limited is resolutely focused on the River Niger crossing of its gas pipelines which will give a chance to optimise its assets.

“We are fascinated by the relationship with our partners because they have a track record of delivery.” 

GPP2

Ogunleye also said that the Gas Processing Plant 2 by SEEPCO Company is configured for 125mmsc per day and can consistently deliver between 135mmscf to 140mmscf.

He said; “The message conveyed is that this is just the beginning. Currently, we are already in early discussions regarding GPP3, which will be located in a different area. Sterling remains our preferred partner. The message from the leadership of NNPCL, led by GMD Mr. Mele Kolo Kyari, is clear: Nigeria is open for business, and so is NNPCL. We are committed to partnerships.

“Projects like this debunk the notion that Nigeria is not a place for investment, you can see for yourself and the next focus is GPP3 which the first phase will be a 300mmsc project.”

 

Operational Time Lag

Speaking on the time lag of commencing operations at the ANOH Gas plant, CEO SEPLAT, Roger Brown stated that Seplat is a shareholder in the AGPC, a gas processing partnering company with the NNPCL.

He disclosed that by the second half of the year 2024, ‘the gas plant would begin to pull gas into the market’

Brown said that the gas plant achieved mechanical completion towards the end of year 2023 and concluding the installation of two critical pipelines which will connect ANOH gas into the OB3 pipelines.

“We are thrilled to be the first to reach completion and are eager to proceed. With mechanical completion achieved towards the end of last year, we are now nearing the conclusion of two vital pipelines that will link us to the operational OB3 pipelines. This connection is transformative as it will facilitate gas production.

“This expansion is significant. Gas holds paramount importance for Nigeria, given that Nigeria is primarily a gas province, boasting more gas reserves than oil. Leveraging this abundant resource for domestic use, particularly in electricity generation, is essential. Doing so will effectively lower power costs for the entire population.”

“Once we do that, we will transform all industries, beginning with health care, education and it will bring employment for people” Roger Brown added.

Tackling Environmental Hazards

Project Manager AGPC, Wolter Wielenga explained that the AGPC compresses gas that comes from lower pressure stages, which otherwise would have been flared, back into the domestic grid to power the electricity power plants.

Wielenga said; “We compress any gas that comes out from lower pressure stages which otherwise would have been flared. We compress it to put it back into the gas stream which will be going back into the pipelines to the domestic grid, to power the electricity power plants.”

He said that the flare constructed as part of the plant facility is to address emergency purposes such as cases of process upset or leak.

“We do need a flare for emergency purposes so if we have a process upset or a leak we need to quickly pressurize the whole plant and we do that through the flare. we have the flare. The flare we constructed is for safety reasons,”Wielenga said.

In tackling environmental hazards, Wielenga further explained that “The reduction of our carbon footprint is achieved by utilizing the exhaust heat from the generators, which would otherwise be released into the air, to heat our hot oil system. This system, in turn, heats the crucial part of the process that would otherwise require furnaces, thereby significantly reducing emissions into the atmosphere. The waste recovery unit at the terabyte side effectively eliminates these environmental hazards.”

The CEO Sterling Oil and Head of AHL GPP2 project, Mohit Barot stated that gas processing plant 1 currently produces approximately 12 per cent of Nigeria’s LPG, adding that this has helped in reducing direct import bills and FX requirements for LPG import.

Barot said that the advantage of the second Gas plant would further help reduce import bills on LPG while it also takes the AHL GPP total market from about 12 per cent to a little over 20 per cent.

Gas Streams

He explained the process of splitting gas and what is obtainable in Nigeria’s gas industry.

“Typically, when extracting gas from wells, it can be split into five major streams. C1 represents methane, C2 is ethane, C3 is propane, C4 is butane, and C5 is the condensate, which is in liquid form. While our plant has the capability to process all five streams, our current focus in Nigeria is primarily on C3, C4, and C5. This means we are mainly extracting propane and butane, which together form the commonly known LPG in Nigeria. The ratio of butane to propane is set at four to one, adhering to Nigerian standards.”

Barot explained further that the C5 which is the plant’s condenser is piped back with the crude and sold to the export market.

“The beauty of our operation lies in the fact that the methane (C1) we produce from the initial gas plant significantly contributes to various sectors of Nigeria’s economy. With the upcoming launch of GPP2, our capacity to fuel Nigeria’s industrialisation will be further enhanced, securing a larger share in the country’s economic development,” he added.

A monarch, Emmanuel Eze Aso, the Odozi of Odozi II of Assa kingdom and Chairman Council of Traditional Rulers, Ohaji/Egbema LG, said citing the ANOH gas plant in Assa would improve commerce in the area and transform the host communities.

Direct Benefit

He said; “Citing the presence of this gas plant in our community will undoubtedly draw a multitude of investors. Already, there is a surge in land acquisition, driven by the recognition of the plant’s significance. The anticipated impact on our community is substantial: commerce will thrive, buildings will undergo transformation, and the gas plant’s location will become a notable attraction, potentially fostering tourism. Additionally, this development is likely to spur road reconstruction and other infrastructure improvements. With this leverage, we can confidently make requests, knowing they will be favorably received and granted.”

Protection Plans

HRM Eze Aso pledged to ensure the utmost protection of the facility, affirming the community’s commitment to safeguarding the gas plant without any intention of regretting their investment.

 

 

 

Mercy Chukwudiebere