Oil & Gas
NNPC Weekly: Gas Flaring to End soon as Company introduces New Approval Method
The Nigerian National Petroleum Company Limited (NNPC Ltd.) started the week with a move to tackle the challenges of gas flaring in the country.
The NNPC Group Managing Director/Chief Executive Officer (GMD/CEO), Malam Mele Kyari, during a panel session at the just concluded Nigerian International Energy Summit (NIES 2022) in Abuja, said part of the strategies would be to ensure that any proposed project without clear-cut plans to commercialise or use up its associated gas would no longer be approved.
He said gas utilisation was a major priority of both the Federal Government and NNPC as efforts were on to build infrastructure to replace the current fuel oil and diesel in the nation’s factories with gas which is a cleaner source of energy.
Kyari remarked that the trend was in tandem with the global reality of energy transition.
He, however, stressed that Nigeria as a country needed all the hydrocarbon of today to build the energy of tomorrow.
In his keynote message, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said that the Ministry of Petroleum Resources was ready to provide the needed framework and support for seamless energy transition in the country.
Also speaking at the event, a former Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said focusing on fast-tracking oil production, in-country refining, developing funding stream and leveraging the Petroleum Industry Act (PIA) were some of the solutions to the industry’s current challenges.
He advised that gas should be seen as transition fuel with estimated life span of 20 years, adding that industry players should begin to look at alternative sources of energy such as solar and wind to catch up with the world before 2060.
Other panelists including the Managing Directors of Chevron, SPDC, Exxon Mobil, Deputy Managing Director of Total Energies and General Manager of NLNG expressed commitment to the energy transition aspiration of the Federal Government, while indicating their willingness to partner with NNPC for better business opportunities.
Speaking at the CEO Roundtable session with the sub-theme: “Strategies for Confronting the Energy Transition” Kyari said a key strategy to tackle the energy transition challenge was to beef up investment in the development of physical infrastructure.
This, he said would get electricity to end users across every part of the country.
“We know that in this country, anything less than 30,000 to 40,000megawatts of electricity cannot serve this country adequately.
“The population is growing, the middle class is growing, in fact, their energy requirement is very different; rural-urban migration is at its peak.
“This means that you need more and more infrastructure on ground to close that gap.
“So, we need to be much more productive, industrial growth must be accelerated, infrastructure must be put in place in the short term to grow the economy to a level where we can generate enough revenue to close energy poverty gap.
“We must answer the electricity question in the country,” Kyari said.
Meanwhile, President Muhammadu Buhari has called on investors in the energy industry to avail themselves of the conducive environment provided by the Petroleum Industry Act (PIA) to accelerate investment in the Nigerian energy sector.
Speaking at the opening of the just concluded NIES 2022, the president said that with the PIA in place, there should be no excuses for players in the nation’s petroleum industry not to deepen their investments, especially in the gas sector.
The president, who was represented by the Minister of State for Petroleum Resources, Chief Timipre Sylva, noted that the world was moving away from fossil fuels.
Buhari said it would be in the interest of the country to speed up its fossil fuel exploitation and make good use of the resources for the betterment of the country rather than abandon the huge oil and gas reserves.
He acknowledged the demands for energy transition and assured that the country was prepared to face the challenges.
Speaking in his capacity as the Minister of State for Petroleum Resources, Sylva, said the world should support a drive to develop African natural gas production, describing it as green energy to boost electricity generation.
Sylva explained that for countries such as Nigeria, which was rich in natural resources but still energy poor, the transition must not come at the expense of affordable and reliable energy for people, cities, and industry.
On his part, the NNPC CEO, Kyari, said that the company would continue to develop Nigeria’s gas resources in spite of the exit of International Oil Companies (IOCs) from the country due to the global push for energy transition and net zero carbon target.
On energy transition, Kyari said the NNPC would work with its partners to facilitate the process in Nigeria regardless of the massive drop in investment in fossil fuel projects amidst exit of IOCs from Nigeria.
The NNPC boss stated that Nigeria and most sub-Saharan Africa countries were energy deficient.
He said the world had acknowledged the place of gas as a transition fuel, stressing that it would not be possible for gas to play that role unless there were investments in the gas sector to produce, process and make it available to users.
He informed that funding for fossil fuel projects had dropped by about 50 per cent when compared to what it was about 10 years ago.
Also, the Secretary-General of the Organisation of the Petroleum Exporting Countries (OPEC), Dr Sanusi Barkindo, and other African Energy Ministers at the summit defended investments in fossil fuels.
They insisted that the global push for energy transition to net zero carbon emission was not in favour of Africa.
They argued that Africa accounted for less than three per cent of global carbon emissions while some 600 million Africans had no access to electricity, stressing that it would be counter-productive to halt investments in fossil fuels in Africa.
Still in the week under review, the NNPC Ltd. signed a multi-billion dollar Gas Sales Agreement (GSA) with its partners.
The partners are Shell Petroleum Development Company (SPDC), Total Energies, ENI and the Gas Aggregation Company of Nigeria (GACN).
The aim is to deliver 70million standard cubic feet (mscf) of gas to Dangote Fertiliser Limited for fertiliser production and to support the Federal Government aspiration to boost agricultural development in Nigeria.
Speaking at the signing ceremony in Abuja, the CEO/GMD of NNPC, Malam Mele Kyari, said that the milestone of delivering that huge volume of gas to Train 2 of Dangote Fertiliser plant was part of the company’s drive to ensure greater gas utilisation in the country.
He emphasised that the initiative would boost gas supply to the domestic market in alignment with the Federal Government’s plan to transform Nigeria into a self-sufficient nation in fertiliser production.
In his remarks, the Chairman/CEO of Dangote Group, Mr Aliko Dangote, said that the execution of the gas sales agreement would not only help to meet up with fertiliser supply into the domestic market, but would also attract about $1.8billion foreign exchange into the country.
He commended the NNPC GMD for his visionary leadership that led to the actualisation of the project, noting that with GSA, Nigeria would soon become the 7th largest producer of fertiliser in the world and second in Africa behind Egypt.
On his part, the Chairman of Shell Companies in Nigeria/Managing Director of Shell Petroleum Development Company (SPDC) Nigeria, Mr Osagie Okunbor, appreciated the NNPC GMD and other partners for the effort, describing it as the fastest GSA executed in recent history.
Also in the week, the Minister of State for Petroleum Resources Chief Timipre Sylva expressed satisfaction with all the measures so far put in place by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the NNPC limited to bring the current fuel supply disruption in the country to an end.
Sylva who stated this when the GMD/CEO of the NNPC Limited, Malam Mele Kyari, and the Authority Chief Executive, Mr Farouk Ahmed, briefed him on the various measures put in place to end the scarcity of PMS commended the CEOs of the two agencies and expressed confidence in their ability to bring the situation under control.
Describing the situation as an accident, the Minister pledged his support to the NNPC and the Authority while appealing to consumers to be patient as all hands were on deck to end the supply disruption.
Meanwhile, the chairperson of the Board of Directors, NNPC Limited Sen. Margery Chuba Okadigbo expressed confidence in the ability of the current NNPC management to drive the company to greater heights.
Speaking on the sidelines at the just concluded NIES 2022, Sen. Okadigbo said the PIA had placed NNPC in a position of global competitiveness, adding that Kyari, The GMD/CEO has demonstrated the requisite capacity to transform the company into a world class energy company.
Visit us on www.nannews.ng for more details. (NAN)
By Cletus Akwaya
Call it Dangote Republic and you would not be wrong, for that is what it means in real sense.
The ultra-modern Dangote Refinery and Petrochemical complex located at the Lekki Free Trade Zone in Lagos is the World’s Engineering wonder.
A guided tour for top Media executives in the country by the President, Dangote Industries Group himself, Alhaji Aliko Dangote on July 14, provided a rare privilege and opportunity to appreciate the project that has emerged as the World’s largest single train petroleum refinery.
Dangote, the Kano-born business mogul and Africa’s richest man, whose vision for the industrial transformation of Nigeria led to the initiation of this project is certainly a fulfilled person, having accomplished such a gargantuan task in the spelt of just about 10 years.
The refinery, which is built and equipped with the latest technology in the industry. It is a behemoth sitting on a huge land space of 2, 735 hectares, approximately seven times, the size of Victoria Island, the octane section of Lagos, which has become the abode for the very rich in the nation’s commercial nerve – centre over the decades.
The land was provided by the Lagos state government after the payment of $100million dollars by the Dangote Group as cost of the land.
The edifice didn’t come easy as the engineers had to reclaim 65million cubic metres of sand through dredging of the Atlantic coastline to pave way for the construction of the refinery and its accompanying facilities especially the Jetty.
The Dangote refinery is not a stand-alone project as it has a coterie of associated industries and infrastructure making it a self-reliant complex.
For instance, the company has a fully developed port (jetty)for maritime operations for both in-take of crude and discharge of refined products. This perfectly compliments the huge pipeline network that lands into the Atlantic for intake of crude and loading of refined products to ships. Its Jetty, which stretches 9KM into the international waters in the Atlantic Ocean and 12.5 KM from the refinery is perhaps one of the most modern in the world built with sand piles that shield the final landing points from the violent oceanic waves, thus providing for safety and stability of ships, barges and oil tankers.
The complex is accessed by 200KM network of concrete under-lay and well asphalted road network to ease vehicular traffic. The refinery has its dedicated steam and power generation system with standby units to adequately support operations of the various plants in the complex.
It has successfully completed a 435 MW power generating plant for its operations. The power generated from this plant surpasses the entire distribution capacity of Ibadan Electricity Distribution company, which supplies electricity to five states of the Federation including Oyo, Osun, Ondo, Ekiti and Kwara.
The Dangote refinery with a capacity of 650,000 bpd of crude oil is designed to handle the crude from many of the African countries, the Middle East and the US light crude. Its petrochemical plant is designed to produce 77 different high-performance grades of polypropylene, which is the major raw material for numerous industries and other refineries. With a huge refining capacity, Alhaji Dangote said the products from the refinery company would easily meet 100 per cent the needs of Nigeria’s demand for gasoline, diesel, Petrol and Aviation Jet with 56 per cent surplus for export, from which the company projects to earn a princely $25billion per annum from 2025.
The company has facility to load 2,900 trucks with its various products in a day by land and millions of litres of products through the waters depending on where the orders come from. The $25million projected revenue in 2025 could translate to a huge relieve for the nation in dire need of foreign earnings to shore-up the value of the nation’s currency.
The associated industry, the Dangote Fertilizers Limited also situated in the complex utilises the raw materials from petrochemicals to produce different varieties of fertilzers especially Urea, NPK and Amonia grades of fertilizers. Apart from the local market, Dangote is already exporting its fertilizers to other countries including Mexico, a testament to its high quality that meets world standards.
This feta, the President of Dangote industries explained was possible because of the high quality, the company has opted to pursue. In between the refinery and the fertilizers complex lies a 50,000 housing estate, which provided accommodation for the construction workers at the time of construction especially during the COVID-19 lockdowns of 2020, when workers remained encamped on the project site to continue with the work.
What stands out the Dangote Refinery is perhaps not in its sheer size and capacity but in the fact that it is perhaps the only of such projects whose Engineering, Procurement and construction(EPC) was done directly by the company without engaging the world renowned refinery constriction companies like Technip Bechtel (USA)Technip (France)Aker Solutions (Norway)Chiyoda Corporation (Japan)SNC-Lavalin Group (Canada)J. Ray McDermott (USA)JGC Corporation (Japan)Hyundai Heavy Industries (South Korea)Foster Wheeler (USA) and Daelim Industrial Company (South Korea)
“The design of the refinery was handled by dozens of Engineers and technical experts assembled in India and Houston, Texas, USA to execute engineering designs of the refinery,” said Edwin Kumar, the Executive vice President, Oil and Gas for the Dangote Group who midwifed the birth of the refinery complex.
“We didn’t give out contracts to anybody, we bought every single bolt and equipment ourselves and had it shipped into the country,” Dangote explained to his guests.
Part of the equipment imported into the country was the procurement of over 3,000 cranes to handle the evacuation of huge consignments of machinery from the wharf and for subsequent installation at the construction site. The cranes have become an unusual assemblage of such equipment to be found in one place on the African continent.
If there was any doubt that Alhaji Aliko Dangote is Africa’s richest man, the successful completion of the refinery and petrochemical complex at the cost of about $20billion has further confirmed his status as Africa’s leading businessman and entrepreneur.
However, Dangote does not really accept that he is the richest man on the continent,
“When you are rich, you accumulate cash, but when you wealthy, you create wealth” he told the top Media executives on tour of the huge project, explaining that he would rather prefer to be referred to as a “Wealthy man.”
And consistent with his business philosophy, Dangote hinted of plans to list the refinery on the Nation’s stock exchange by the first quarter of 2025. His vision is to avail the public of 20 per cent of the shares so as to ensure participation by Nigerians and even international portfolio investors.
The refinery company and the entire of Dangote Group at the moment provides direct employment to about 20,000 Nigerians and much indirect jobs to Nigerians, making it the highest employer of labour outside the government.
Most interestingly, the highly technical operations of Dangote refinery is operated by over 70 per cent of local manpower who work in the refinery control, centre, the numerous production and quality control laboratories among others. Some of the staff who explained their tasks to the visiting media executives said they were graduates of Engineering and allied disciplines recruited mostly from Nigerian universities and trained in various institutions abroad for periods ranging from sixth months – one year to master refinery operations. Through this strategy, Dangote has ensured transfer of technology to thousands of Nigerian youths.
“We don’t know where they come from as long as they are Nigerians and if they decide to leave and join international oil companies for better job opportunities, we have no problem with that,” Dangote responded to a question on the strategy to retain the technical manpower for stability of the refinery’s operations.
The Dangote Refinery is a Republic of some kind, at least an economic or industrial Republic.
But the man who presides over this ‘industrial empire’, Alhaji Dangote says his only ambition is to boot the nation’s economy and ensure netter life for Nigerians.
“When you import any product into Nigeria, you are importing poverty and exporting our jobs to those countries from where you are importing” Dangote said adding “this is why I want economic nationalism in Nigeria.”
Dangote’s vision even goes beyond Nigeria as he has cement factories and other business concerns in about 13 African countries including Ghana, Ethiopia, Tanzania, Uganda, etc. This signifies his continent-wide dream to transform Africa’s economies.
There has been attempts by some international oil companies to frustrate the successful take-off of the refinery, through over pricing and in some instances outright denial of crude supplies for processing. This made Dangote to commence importation of crude from the US. However, the cheering news that the Nigerian National Petroleum Company Limited (NNPC) has finally approved a supply arrangement has raised hopes that full operations will commence and that the long-awaited Dangote oil products will reach consumers around the country from August.
At last, the Dangote Group may have achieved its objective to serve as the elixir to Nigeria’s industrialisation effort. This is perhaps the greatest legacy of Africa’s richest man to his country of birth.
Dangote Industries Ltd. has confirmed a minor fire incident at its Effluent Treatment Plant (ETP) in Lagos on Wednesday and which was swiftly contained.
The Group Head of Corporate Communications at Dangote Group, Anthony Chiejina, disclosed this in a statement in Lagos.
Chiejina said: “There is no cause for alarm as the refinery is operating and there is no recorded injury or harm to any of our staff on duty.
”He said that emergency services responded on time to contain the incident.
Although initial reports said no injuries were sustained.
According to him, the cause of the fire is currently unknown, and investigations are underway to determine the extent of the damage and the cause of the incident.
The Dangote Refinery is a massive project with a projected refining capacity of 650,000 barrels per day.
The Nigeria Security and Civil Defence Corps has busted illegal crude oil refining sites at cemeteries in Abalama and Oproama Communities in Asari-Toru Local Government Area of Rivers State.
The security outfit said the feat was achieved by its Marine Anti-vandal Squad after a four hour operational tour on water across the two coastal communities.
Speaking to newsmen after the operation, the NSCDC spokesman, Rivers State Command, Superintendent Olufemi Ayodele, said its operatives successfully uncovered the illegal bunkering sites through credible and sustained intelligence.
Ayodele recalled that the NSCDC Commandant General, Dr Ahmed Abubakar Audi, gave a marching order to all formations in the Niger Delta to step up intelligence and operational efficiency in the fight against oil theft and illegal oil bunkering activities.
He expressed worry about how the miscreants devised a new means of converting cemeteries to illegal bunkering sites, saying they had already loaded several illegally refined crude and refined Automotive Gas Oil also known as diesel was sighted in boats by the riverside.
The state NSCDC image maker however said on sighting its operatives the hoodlums took to their heels though they were giving a hot chase, pointing out that men of the Marine Anti-Vandal Squad are on their trail to ensure they are arrested and prosecuted.
He stated, “Acting on this directive the Rivers State Commandant of the NSCDC, Basil Igwebueze, deployed the Marine Anti-vandal Squad to the crime scene where several boats filled with crude oil and refined Automotive Gas Oil were sighted.
‘This is the Abalama community and behind us is the Oproama community as well where Cemeteries were converted to illegal bunkering sites; Upon our arrival, the suspects took to their heels knowing the squad had superior firepower.
‘The NSCDC as an environmentally friendly agency condemns outright all acts of environmental pollution, degradation of aquatic life and economic sabotage.
“We have contacted some good people in the two communities and they are cooperating with us so that the perpetrators would be apprehended in due course. However, the quantities in litres of the locally refined AGO cannot be ascertained.”
He added, “Consequently, the NSCDC Rivers State Command helmsman has further issued a stern warning against the activities of vandals and illegal bunkers in the state affirming that the fight against oil theft is a relentless war and suspects arrested with their sponsors would be made to face the full wrath of the law.”
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