A Review of the Nigerian Energy Industry

NNPC mulls FLNG option to exploit offshore gas

Shell+FLNG+Facility+2Sam Iketuonye 15 August 2013, Sweetcrude, Lagos – The Nigerian National Petroleum Corporation, NNPC, has announced plans, with six other companies, to exploit ‘stranded’ natural gas resources offshore the country through a Floating Liquefied Natural Gas, FNLNG, vessel.

Executive Director, Corporate Planning and Strategy of NNPC, Dr. Timothy Okon, disclosed this at a stakeholders’ forum organised by the Nigerian LNG Limited which focused on the challenges and prospects of Nigeria’s gas-related projects, including the LNG, liquefied petroleum gas or cooking gas and natural gas liquids.

Represented by Mohammed Bashir, an NNPC official, Okon said the talks with the six companies, one of which is Omega-Butler Nigeria Limited, was in top gear as he emphasised the advantage of the FLNG option.

According to him, the FLNG technology would be deployed to extract stranded gas from offshore deposits. “As at now, discussions are ongoing and NNPC is considering proposals on this, but there are about six companies that have indicated interests to work with the NNPC on this; the technology of cost effective and easy to deploy,” Okon said.

Nigeria is endowed with 182 trillion cubic feet of natural gas, going by 2012 figures disclosed recently by Petroleum Resources Minister, Mrs Diezani Alison-Madueke. This is a marginal drop in reserves compared with 2011 figures.

A bulk of this natural endowment is being flared due to unavailability of options to utilise the gas, thus ranking Nigeria second only to Russia in the global gas flaring chart. But, the Federal Government is hoping that this would be a thing of the past with its gas master plan launched last year with fanfare.

Alison-Madueke has been emphatic that the government was committed to promoting investments in Nigeria’s gas sector with the intention of creating a gas-based industrial revolution within the country’s hydrocarbon industry.

Losing over N735m daily to gas flaring
According to Department of Petroleum Resources, DPR, figures, Nigeria is losing over 4.9 million dollars (more than N735 million) daily to gas flaring. DPR Director, Mr George Osahon, stated this recently in Lagos.

Nigeria gas endowment, he said, is up to 600 trillion cubic feet, hence the country is often described as large gas haven with little oil. “Oil production stands at 2.5 mbpd, while gas flared stood at 1.4 billion cubic feet per day. This means that an average of 4.9 million dollars worth of gas is being flared on daily basis which translates to about 1.4 billion cubic feet of gas flared daily by the international oil companies,’’ he said.

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