Lagos — Managing Director/CEO and Country Chair, Total Companies in Nigeria, Mike Sangster, has called on Nigeria to put in place funding mechanisms for cost recovery or profit-sharing for investments in gas projects.
The French oil major’s boss made the statement at the management session of the 37th Nigerian Association of Petroleum Explorationists, NAPE, conference on Wednesday.
According to him, although investments in PSC oil projects are recovered from oil, no mechanism is currently agreed for cost recovery or profit sharing for investments in gas projects.
It would be recalled that in 2016, the NNPC/Total E&P Nigeria Limited joint venture commenced the supply of gas to the Alaoji Power Plant in Abia State.
This became possible after the completion and start-up of the Obite-Ubeta-Rumuji, OUR Pipeline, and the Northern Option Pipeline, NOPL projects by the NNPC/TEPNG JV in August 2016.
The completion of these pipelines is an important milestone in the activities of Total in Nigeria.
The NOPL has since become unique and strategic in meeting the Federal Government’s objectives of gas supply to the domestic market.
TOTAL’s partnership with the NLNG is well known.
“We are an NLNG partner with 15% stake in the company, which has a liquefaction capacity (Trains 1- 6): 22 MT/Y of LNG. But the planned Train 7 will increase NLNG capacity from 22 to 30 MTPA. Total is committed to the Nigerian Gas Master Plan – reducing flaring and monetizing gas. We are also committed to the supply of additional gas to NLNG train 7 for increase of NLNG capacity. We have signed three Gas Supply Aggregation Agreements (GSAA) and we take our domestic gas supply obligations under these agreements quite seriously”, he said.
However, he said the company is aware that challenges remain in the areas of infrastructure; legal and regulatory framework; commercial framework (pricing policy) via the National Domestic Gas Supply & Pricing Regulations of 2008 vis-à-vis the new National Gas Policy approved by the Federal Executive Council, FEC in 2017.
Total achieves 100% gas flare
The oil and gas firm achieved 100% gas flare out on our Ofon Field in December 2014 and the gas is currently monetised. In 2015, Total E&P Nigeria received the World Bank – Global Gas Flare Reduction Partnership (GGFR) Excellence Award.
This, Sangster said is a major milestone in line with the aspiration of Government, which is why Ofon flare out achievement has been proposed as part of Nigeria’s Nationally Determined Contribution, NDC to greenhouse gas emissions reduction. We are committed to achieving zero flarings in all our operations.
“Similarly, our flagship deepwater Egina Field, which came on stream in December last year was also commissioned with zero flare out and has added 10% Nigeria daily oil production. In fact, since 1999, all Total projects in Nigeria are sanctioned on a no-flaring policy”.
He said the firm’s ambition is to become the “Responsible Energy Major” which explains the meaning of its motto “committed to Better Energy”.
“This ambition challenges us to provide more reliable, affordable and clean energy to the world’s growing population”.
The Total Group has been present in Africa for more than 80 years and has been involved in exploration activities in Nigeria for 57 years. We have a broad and diversified portfolio in Nigeria, with activities spanning onshore, conventional offshore, deepwater and LNG.
Total has developed a strong partnership with the Nigerian National Petroleum Corporation, NNPC and other partners.
Total’s upstream branch plays a significant economic and social role in Nigeria, operating nearly 15% of the country’s production. Nigeria, as one of our core areas of activities, is also crucial to the Total Group, accounting for 12 % of its equity production. In the last five years, Total has invested approximately 10 billion US dollars in the country.