A Review of the Nigerian Energy Industry

Relief as NNPC’s Forcados Pipeline resumes operations

28 January 2015, Abuja – Nigerians will experience relief in power supply as the Trans-Forcados oil pipeline, which transports crude oil to an export terminal and gas to power stations, resumed operations after one week of closure.

Diezani Alison-Madueke 2
Mrs Diezani Alison-Madueke, Minister of Petroleum

The closure of the pipeline a week ago due to sabotage had led to a drop in power generation by 1,500 megawatts as almost half of the country’s gas production was affected.

Though the pipeline is a crude oil facility, gas fields that supply gas to power stations had to be shut down because the liquid condensate they produce together with gas is normally evacuated through the pipeline.

The pipeline, which belongs to the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), transports Forcados grade of crude oil to the Forcados export terminal, scheduled to export about 260,000 barrels per day this month and 210,000 barrels per day in February.

Reuters quoted NNPC’s Group Executive Director in charge of Gas and Power, Dr. David Ige, as saying that the pipeline has resumed operations.

“Forcados is a major, artery…when this pipeline is out, we lose gas production… (It) accounts for 40-50 per cent of gas production in the country,” Ige said.

“Each time the pipeline goes down, two power plants also lose input and electricity supplies for the east of the country are affected,” Ige added.

He said the country produces around eight billion cubic feet of gas per day, of which 1.9 bcf per day is allocated for domestic consumption.

SEPLAT Petroleum Development Company, which is listed in both London and Nigeria; Pan Ocean Corporation and the NPDC transport their crude oil through the pipeline.

SEPLAT had built alternative pipeline to supply crude to the Warri Refinery but the majority of the 76,000 barrels per day it produced in December 2014 was transported through the Forcados pipeline.

With the closure of the pipeline due to vandalism, SEPLAT lost over 30,000 barrels of oil per day as it was forced to shut down Oben, Amukpe and  Sapele stations in Oil Mining Lease (OMLs) 38 and 41 on December 30, 2014, as a result of leak on the Kantu/Ofugbene/Yeye axis of the 50-kilometre stretch of the 28- inch Trans Forcados Pipleine network.

Seplat, which owns 45 per cent stake in Oil Mining Leases OMLs 4, 38 and 41, operates these leases under a joint venture with the NPDC.

Apart from the over 30,000 barrels per day lost by Seplat and NPDC in OMLs 4, 38 and 41, NPDC also lost production at OMLs 26 and 42, which it operate.

– This Day

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