FG Relocates Gas Project Site

27 Nov 2012

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Mrs. Diezani Alison-Madueke

By Chineme Okafor
The Federal Government has moved the proposed site for its multi-billion dollars gas-based industrial park from its original location in Koko to Ogidigbe, both in Delta State.

It disclosed yesterday at the 2012 edition of the Nigerian Gas Association (NGA) conference in Abuja that the relocation became necessary to optimise the inherent potential in the project, which is ensconced in its gas revolution agenda which President Goodluck Jonathan launched in 2011.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who was represented by the Group Executive Director (GED), Gas and Power of the Nigerian National Petroleum Corporation (NNPC), Dr. David Ige, said at the conference that projects at the new site will commence within the second quarter of 2013 and completed between 2016 and 2017.

She noted that the decision to modify the project location was borne out of the need to create a competitive gas-based industrial park that could attract global players in the gas market.

“Basically, what we are trying to do is to ensure that we create a gas-based industrial agenda that is going to be competitive globally. A lot of factors came into play. We have considered various locations, Koko was the desired location, originally it is land-based, accessible and has a port of its own but as the agenda started to grow, it was evident that for the size of fertilizer that we are now beginning to look at and the size of petrochemical that is now beginning to materialise, the kind of vessels that you will require to evacuate those products now becomes a lot bigger than what we even started with.

We started with a smaller capacity fertiliser and petrochemical plant but now the investors are stepping up the game and when you do that and look at 50,000tonnes dead-weight vessels then the Koko channel becomes a problem because it require a significant amount of dredging over a long distance to the coast and that informs an optimisation of location,” she said.

The minister explained: “What we are looking at is actually a situation where at the coast in the new location we have the big plant which requires the heavy vessels but also the spin-off industries will now be located on the mainland because there you have fewer requirements for heavy vessels.”

She further clarified that dredging the Koko channel would be a significant cost on the project, hence, the decision to relocate to Ogidigbe which is more coastal in nature, adding that about 2750 hectares of land has also been secured from the Delta State government at the new location.

Accordingly, the government’s gas revolution initiative is anchored on a few primary investors which include Nagarjuna of India for the 2.6 metric tonne per annum (mtpa) urea plant, Xenel of Saudi Arabia for the 1.3mtpa polyethylene plant and 400 kilo tonnes per annum (ktpa) polypropylene plant.

Others are the Chevron/Shell/NNPC/Sahara 2.2 billion cubic feet per day (bcf/d) gas processing facility and Agip/Oando/NNPC 800 million cubic feet per day (mmcf/d) gas processing facility.

In her assessment of the government agenda for Nigeria’s gas industry as well as the status of projects in the sector, Alison-Madueke stated: “We made significant progress in advancing the commercial framework for gas in the Nigerian domestic market and gas prices were migrated to more commercial levels, commercial agreements were entrenched and good progress made in critical infrastructure as well as our emergency gas supply programme specifically targeted at the power sector.

“With these reforms, I am convinced that we have created the platform for investor confidence on our wider gas revolution initiative and in this context, we are making progress. Brass LNG is progressing steadily and we are hoping that over the next year, in early 2013 they should have its Final Investment Decision (FID) taken; most of the critical requirements or pre-conditions for FID are almost at rest now and I’m reasonably confident that in 2013, we should see an FID.

“OKLNG as you know for a while has slowed down but now we are looking at that again because we see a huge market opportunity globally over there because if Nigeria is going to take the slice in that market we need to make sure that as many of our projects can come in and come on board competitively, so OKLNG, Brass LNG, NLG27 are projects that remain focus of the government to make sure that we take advantage of Nigeria’s position now before the competitive stages.”

Tags: Featured, Nigeria, News, Gas, Project Site, FID, NNPC

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