28 March 2017, Sweetcrude, Abuja – In-country integration of the Egina Floating, Production, Storage and Offloading (FPSO) units at the SHI-MCI yard in Lagos will receive full collaboration from the Nigerian Content Development and Monitoring Board (NCDMB) and ancillary agencies. That will be the first time it would happen in Nigeria.
The leadership of the NCDMB and other agencies, including the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA), Nigerian Customs Service (NCS) and the Nigeria Export Processing Zones Authority (NEPZA) declared their commitments last week after inspecting the Total Upstream Nigeria Egina’s FPSO undergoing construction at the Samsung Heavy Industry (SHI)’s yard at Geoje, South Korea.
The FPSO is scheduled to sail away in June 2017 and arrive SHI-MCI yard in Lagos, September 2017 where the six modules fabricated in-country will be integrated, with 21400 pre- commissioning tasks expected to be performed. After integration, the FPSO will be towed to the Egina field, about 200 kilometers south of Port Harcourt, Rivers State and hooked-up for operation.
Speaking during the visit, the Executive Secretary, NCDMB, Engr. Simbi Wabote charged Total Upstream Nigeria (TUPNI) to identify issues that required the Board’s intervention for quick resolutions ahead of the arrival of the FPSO.
Such approvals, he explained, like authorizations for expatriates who would lead the integration, towing of the FPSO and other scopes, would guarantee smooth conclusion of the project.
He underscored the importance of the Egina project to the Nigerian economy, particularly the addition of 200,000 barrels to the country’s daily crude oil production. Egina will also contribute to the Federal Government’s commitment to address production decline and shore up national revenue.
The Nigerian oil and gas industry needs more projects to build capacity and keep existing facilities from wasting, he added.
The Executive Secretary, who hailed Total and SHI for their Nigerian Content credentials on the project, informed that “this happened because of the push by the NCDMB; even though Total was convinced, they still needed a little push.
“We are happy with the progress of the project and its contribution to Local Content and the national economy. FPSOs have been built abroad in the past and moved straight to site. This is the first time that many Nigerians will see what it looks like.”
Speaking further, the NCDMB boss announced plans by the Board to organize a one-day knowledge sharing session on Nigerian Content, to enable international operating oil companies (IOCs) share strategies they deployed on their projects.
The session, he explained, would ensure that IOCs can leverage on Nigerian Content experiences of others when planning projects or faced with similar challenges.
Wabote reiterated that NCDMB was developing guidelines that would ensure that Nigerian companies participate actively in the operations phase in oil and gas projects, noting that the sustainability of Nigerian Content lie in the operations phase which often lasts up to 25 years.
In his comments, Deputy Managing Director, Total Upstream (TUPNI), Mr. Ahmadu Kida Musa hailed the collaboration between the TUPNI and NCDMB teams on the Egina project and charged the Board to continue pushing the boundaries of Nigerian Content implementation.
He commended regulatory agencies that pledged to support the in-country integration phase, noting that “some of the things we will be seeing have not been done in Nigeria. We would need accelerated approvals, while not breaking the law.”
Musa recalled that Total embarked on the project in 2013 when the country faced economic uncertainties, particularly the Petroleum Industry Bill (PIB) and 2015 general elections.
According to him, “Total believed in Nigeria, in Nigerians and on Egina. The project has set Nigerian Content standards and we are proud of the jobs it created, inputs from Nigerians and the fact that contributions from Nigerian companies are comparable to the ones done in South Korea.”
The DMD also commended SHI and LADOL for forming the consortium that has made in-country integration of the FPSO possible, noting that they have positioned themselves for future projects. He challenged the partners to work together to further develop the yard and attract the African market.
The Managing Director of SHI-MCI, Mr. CW Kim in his remarks, reaffirmed Samsung Heavy Industry’s preparedness to help Nigeria upscale its technological base. This philosophy informed the decision to make the long term investment, he said.
He added, “We decided to invest in Nigeria for the long term, not just for Egina. It would not make sense to invest for just one project; it needs several projects. We have capacity in construction and we have been in business for over 40 years. To succeed in Nigeria, we plan to be competitive and operate with a long term plan.”
The Egina field development consists of the FPSO, connected to the Subsea Production System via Umbilicals, Flowlines and Risers and Offloading Terminal.
In-country integration of the FPSO and fabrication of six modules of the vessel created 5000 direct jobs and 5000 indirect jobs. Increased domiciliation of future FPSO projects through the fabrication of more modules is expected to create additional jobs, estimated to reach 30,000.