FG Targets $200m Yearly Revenue from NPDC Gas Facility

•Buhari says Nigeria closer to self-sufficiency

By Emmanuel Addeh

The federal government said yesterday that the Integrated Gas Handling Facility (IGHF) and Liquefied Petroleum Gas (LPG) processing and dispensing plants in Ologbo, Edo State, would generate $200 million in annual revenue into the country’s coffers.

“The lean gas can generate at least 267 megawatts of power per day and also ensure feedstock to gas-based industries. In total , the NPDC stands to generate revenue in excess of $200m per annum from the IGHF plant,” a documentary put together by the NPDC during the event showed.

Speaking during a partially virtual and physical ceremony to officially declare the over 200 million standard cubit feet per day project open, President Muhammadu Buhari said Nigeria has moved a step closer to the nation’s dream of full utilisation of its abundant gas potential.

The facility was built and operated by the Nigerian Petroleum Development Company (NPDC), an upstream subsidiary of the Nigerian National Petroleum Corporation (NNPC).

Buhari noted that the integrated project was capable of supplying 20 per cent of the current LPG demand in the country, stressing that it underlines the seriousness with which the federal government is handling its gas projects.

“The Oredo Integrated Gas Handling Facility and its associated NGLs depot will be delivering 240,000 metric tonnes of commercial grade liquefied petroleum gas and propane. It will also deliver about 205 million standard cubic feet per day of lean gas to the domestic market.

“In addition to its import substitution benefits that bring us a step closer to self-sufficiency in LPG production and also supporting the growth of small and medium enterprises in the host communities, this project will create hundreds of direct and indirect employment opportunities for our teeming youths (both skilled and unskilled).

“Apart from being the largest onshore LPG plant in Nigeria with the potential of supplying about 20 per cent of Nigeria’s LPG demand, the Oredo Integrated Gas Handling Facility was carefully situated at a corridor proximate to over 80 per cent of Nigeria’s LPG demand source,” he added.

The president said the project was a follow-up to the commitment of his administration towards making year 2020 as Nigeria’s “Year of the Gas,” adding to the AKK pipeline project, the NLNG Train 7 as well as other such facilities being built in the country.

He said: “At the turn of the year 2020, this administration made solemn declarations to the Nigerian public over its plans to expand the gas sector footprints by scaling-up the development and utilisation of Nigeria’s abundant natural gas resources to help spur industrialisation.

“It is also to provide clean and efficient energy for transportation and household use while increasing our exports into the international market. It is on the backdrop of this commitment that the Year 2020 was dedicated and embodied as Nigeria’s year of gas.

“Since then, we have followed through with actions that have translated those plans into tangible projects with monumental value additions to the Nigerian economy. We accomplished key gas infrastructure projects like the OB3 and ELPS 2 and flagged-off the construction phase of the 614 km AKK pipeline project.”

The president noted that it was not a coincidence that the completion and inauguration of the aforementioned gas infrastructure projects in 2020 followed closely with progress made on other projects.

He stated that the wrap-up of year 2019 with the Final Investment Decision (FID) for NLNG Train 7 and exiting 2020 with yet another milestone of inaugurating the Oredo IGHF LPG processing and dispensing plants, which will also support the ongoing drive towards providing alternative auto fuel under the National Gas Expansion Programme, was part of efforts to rev up gas utilisation.

In his speech, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the project highlighted the commitment of NNPC in eliminating gas flares while increasing Nigeria’s value realisation from gas.

He added that the entire LPG and propane production is targeted at the Nigerian market, further affirming the conscious efforts of the NNPC and the federal government in growing its participation in the LPG value chain to boost domestic supply, lower prices and deepen LPG penetration to safeguard the environment.

“The administration of President Muhammadu Buhari has made unprecedented strides in the area of gas infrastructure development to facilitate exploitation and monetisation of Nigeria’s massive gas resources.

“This highlights the commitment of the NNPC in eliminating gas flare while increasing Nigeria’s value realisation from gas. The entirety of the LPG and propane production is targeted at the Nigerian market and growing participation in the LPG value chain to boost domestic supply, lower prices and deepen LPG penetration,” he said.

NNPC Group Managing Director, Mr. Mele Kyari, said the president’s clear directives to the Ministry of Petroleum Resources and the NNPC to deepen the utilisation of gas in the country were being followed to the letter.

“The president gave clear directive that we must deepen domestic gas utilisation and monetisation and provide a platform where Nigerians can benefit from the enormous gas supplies that we have so that job and prosperity can be created and by implication, bring peace to the country.

“The facility was designed, constructed and delivered with the highest application of Nigerian content and the contractor is a wholly Nigerian company which demonstrated the capacity of Nigerian companies to handle complex projects,” he added.

Kyari stated that in the heat of the COVID-19 pandemic, only the sale of gas did not fluctuate in comparison with other products like crude oil, which is susceptible to high market volatility.

On his part, the Governor of Edo State, Mr. Godwin Obaseki, noted that the domestic gas revolution was starting in Edo with the inauguration of the project, while priority is now being given to the satisfaction of local demand for gas

“We are proud that the Oredo fields account for some of the largest onshore gas reserves in this country. NNPC has thought it wise and proper to use that gas for our domestic economy.

“Apart from agriculture, we have the benefit of oil and gas and we are taking full advantage of this natural endowment. In doing so, we will continue to collaborate with all local and international investors to make sure we take the full benefit of the natural assets,” he said.