NNPC partners with Seplat to boost domestic gas supply

Regular supply of gas to power plants has been a major issue for power generating plants across the country, despite the large volume of proven gas reserve in the country (202 trillion cubic feet (TCF) of proven gas reserves plus about 600 TCF unproven gas reserves). The Nigerian National Petroleum Corporation (NNPC) is making efforts, to deliver its 7 Critical Gas Development Projects (7CGDP) by 2020, to ease the supply of gas to power plants across the country. This would involve a collaboration with its joint venture partners to increase the amount of gas available to Nigeria’s domestic economy in 2020 to about five billion standard cubic feet per day (5bscf/d) from the current 1.3bscf/d in 2017.

For a quick reminder, the 7 Critical Gas Development Projects (7CGDP) include:

  • Assa North-Ohaji South Field Development (ANOH);
  • Oil Mining Lease 24 and OML 18 Joint Development and Shell Petroleum Development Company Joint Venture/Nigeria Agip Oil Company Joint Venture Unitized Gas Fields
  • NPDC’s OML 26, 30, 42
  • Chevron Nigeria Limited’s OML 49 Makaraba Cluster Development;
  • SPDC JV Gas Supply to Brass Fertilizer Company; OML 13 Cluster Development
  • Cluster Development of Okpokunou/Tuomo West (OML 35/62).

With these projects, the government aims to supply sufficient gas that will generate 15,000MW of electricity by 2020. This will reposition Nigeria for massive industrialization.

In the news, NNPC has just signed a partnership with Seplat Petroleum Nigeria Limited, to deliver 300million standard cubic of gas daily, to the domestic market. This was disclosed in a statement issued by Mr Ndu Ughamadu, in Abuja

He said that the partnership would help in bridging projected shortfall in domestic gas supply in the country.

“The project, an integral part of the 7 Critical Gas Development Project (7CGDP) of the NNPC, is designed to abridge the estimated 3.4 billion cubic feet of gas per day shortfall which could arise as demand increases to about 7 bcf/d by 2020,’’ he said..

He added that the Group Managing Director of the NNPC, Dr Maikanti Baru, at the inauguration urged board members to sustain the momentum and ensure timely delivery of the project.

He also urged the board members to not only deliver within budget but below the budget, without compromising the industry best practices of zero incidences.

‘‘We believe that a private sector driven project should deliver much faster, hence we came up with a structure outside the existing Joint Venture with the intent of getting the appropriate entities to participate in the project.’’ he quoted Baru as saying

He noted that NNPC was fully committed to the initiative and would do whatever possible to keep the dream alive and ensure smooth delivery of the project.

Ughamadu added that Mr Saidu Mohammed Chairman of the Board in his remarks, affirmed the determination of the company’s directors to work assiduously with Management to ensure attainment of set tasks and targets.

He noted that Mohammed described the inauguration as history in the making, adding that this was the first time a midstream company had been unbundled to run on its own from a JV operations.

He expressed confidence that board members would ensure full activation of the shareholders agreement and grow the company to enviable heights in line with agreed timelines.

Also, Austin Avuru, Vice Chairman of the Board and Chief Executive Officer of Seplat Petroleum, described the event as memorable for the indigenous firm, Ughamadu said

He noted that under the watch of the NNPC GMD, Seplat and the corporation had made progress in terms of cementing a partnership that is none acrimonious, saying that Dr. Baru had moved that level of support to the current venture.

“Baru has demonstrated his confidence in indigenous operators by allowing a Nigeria Company like Seplat, to strike this kind of JV with NNPC to deliver a project that is not far from a billion USD and to deliver 300mscf/d into the domestic market and to structure a company to do what others may start doing in future – establishing a stand-alone midstream company.’’ he quoted Avuru as saying





About Olumide Durotoluwa 71 Articles
Olumide writes regularly on Greenergie, with interests in clean tech, business modelling, and analytics. Contact him directly via olumide@greenergie.com.ng

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