Nigeria Names Four Advisers for Mega Gas Infrastructure Scheme
Nigeria has picked four technical consultancies to work on delivery of an ambitious programme of seven gas infrastructure projects, but no price-tag or schedule for their construction has been outlined.
The country moreover has presidential elections in February 2019, so initiatives announced now may struggle to make headway before then. Past initiatives of this kind have also faltered.
The Seven Critical Gas Development Projects (7CGDP) aim to deliver 3.4bn ft3/d capacity to bridge an expected medium-term gas supply gap by 2020. State producer Nigerian National Petroleum Corporation (NNPC) said 7CGDP is essential “to leverage the full potential of gas to meet the target of generating at least 15 gigawatts of electricity by 2020.” Currently gas can generate at most 5 GW in Nigeria.
DeltaAfrik/Worley Parsons and Crestech/Penspen will work with NNPC's projects subsidiary NPDC and various upstream operators in Nigeria, including Shell, on the seven projects, announced NNPC group managing director Maikanti Baru at a signing event July 9.
Roles for the four technical consultancies will include revalidating and carrying out technical studies for development plans, providing financial advisory services for project funding, and advising on any tax breaks needed. They will also advise on fast-track tendering for project implementation, and identify cost estimates and schedules for the respective projects.
Worley Parsons (WP) and Penspen are respectively Australia and UK-based international engineering consultancies. DeltaAfrik is a 51%:49% joint venture of Nigerian engineers DeltaTek and WP. Crestech is a Nigerian engineering firm which which Penspen signed a strategic alliance in 2016.
The four are also expected to study and recommend fast-track tendering process for field development and project implementation, establish realistic cost benchmark(s) for identified projects and develop project schedules and cost estimates for the respective projects among others. There were reports that the government has approved a $92mn payment to the four consultants, but NGW got no response from the president’s office when it sought confirmation.
Osagie Okunbor, managing director of Shell’s Nigeria upstream subsidiary SPDC which is handling three out of the seven projects, pledged Shell’s commitment of the company to executing 7CGDP.
NNPC said the “highlight of the [July 9] event was the formal execution of agreement for the development” of the unitised fields by NNPC with Shell and Eni holding 6.4 trillion ft3 of resources.
The 7CGDP include pipelines and gas gathering systems for the following upstream developments:
- 6.4 trillion ft3 unitised gas fields (Samabri-Bisseni, Akri-Oguta, Ubie-Oshi fields by NNPC/Shell and NNPC/Eni);
- 4.3 trillion ft3 Assa North/Ohaji South field;
- NPDC’s OML 26, 30 &42;
- 2.2 trillion ft3 planned gas supply by SPDC to Brass Fertiliser Company;
- 5 trillion ft3 OML 13 cluster, to support the expansion of Seven Energy Uquo Gas Plant;
- 10 trillion ft3 Okpokunou/Tuomo West (OML 35 & 62).
To add some context, Penspen in 2015 was hired to perform a feasibility study for the westward extension of the West Africa Gas Pipeline, which carries Nigerian gas exports, from Ghana - its current westward extent - to neighbouring Cote d'Ivoire. The contract was awarded by the Economic Community of West African States (Ecowas). But the pipe was never extended, as Nigeria failed to produce enough additional gas for regional exports. The extension is still periodically advocated by NNPC.
NNPC for over a year has failed to progress significantly the 614-km AKK (Ajaokuta-Kano-Kaduna) gas pipeline project, the purpose of which would be to connect Niger Delta gas supplies to central and northern Nigeria, giving the latter an alternative to pollutive oil-fired power generation. Three months ago, contracts were awarded for its outer sections, but not the middle section.
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