DPR Grants LPG Extraction Plant Permit to Operators of Otakikpo Marginal Field


Chineme Okafor in Abuja

The Department of Petroleum Resources (DPR) has approved for the operator of the Otakikpo marginal field in Oil Mining License (OML) 11 — Green Energy International Ltd — a licence to build a Liquefied Petroleum Gas (LPG) extraction plant in Ikuru area of Rivers State.

According to a statement from the Director, Legal and Corporate Matters of Green Energy, Mr. Olusegun Ilori, on Thursday in Abuja, the Licence to Establish (LTE) granted it by the DPR would cover the construction of 12 million standard cubic feet per day (mmscfd) capacity LPG plant.

Ilori explained that the licence approval was part of a pilot gas project approved by the federal government for its zero gas flares operation in the country.

He noted that the company, which began oil production in February 2017, was determined to ensure full utilisation of the gas produced from its field for LPG and power generation, adding that the approval has made it possible for it to take a final investment decision (FID) on the gas project and awarding the Engineering, Procurement, Construction (EPC) and installation of the LPG extraction plant to PCC-LAMBDA Consortium, formed between Nigerian indigenous companies and a Chinese company — Peiyang Chemical Equipment Co. Ltd (PCC).

PCC, he noted, was also the original equipment manufacturer (OEM) and would be responsible for the manufacturing and designing activities associated with the LPG project.

“The gas utilisation programme involves the use of lean gas to power 12 megawatts (MW) gas generator at Otakikpo field out of which 5MW would be dedicated to the host communities in line with its MoU with the government, while the LPG and propane would be bottled and sold. Part of the LPG shall be for domestic use within Otakikpo communities in order to support small scale industries,” said Ilori.

According to him, the LPG plant is expected to be completed within 12 months and would boost Nigeria’s drive to utilise her gas resources for industrialisation.

Similarly, another statement signed by the Technical Director of the oil firm, Dr. Bunu Alibe, stated that it had commenced the process of acquiring 3-D seismic data to maximise opportunities from the Otakikpo oil field.

It stated that the Chinese firm — SINOPEC Changjiang Engineering Services Limited — had been contracted for the 3-D seismic acquisition programme, adding that the acquisition process would commence in January 2018 and be completed by June 2018.

The DPR, it said, has also approved of the exercise to go on, while Green Energy has attracted a unique vendor financing deal with SINOPEC in which payment for the 3-D seismic cost will be from cashflow from existing field production spread over the stages of the project.

Alibe explained: “The 3-D seismic imaging is required to improve the subsurface understanding of the Otakikpo tested geological structure. The 3-D data will be used to high-grade and de-risk opportunities in the farm-out area as well as to increase exploration success rates of the untested structures (Otakikpo South) on the asset. The field which commenced production in February this year, is currently producing over 7000bopd.”

He stated that the programme was amphibious and would cover an area spanning both onshore and offshore surface area of 197 square kilometre and 62 square kilometres subsurface fold, with water depth ranging from shoreline to 16 meters.

“40 per cent of the seismic survey spans the offshore area, the SINOPEC’s M/V SU YOU HAO using the latest solid streamer technology will be deployed for this operation. With a six kilometres offset and nine second record length, these data will provide spectacular imaging of the transitional zone of Niger Delta Coastal Swamp II Depobelt and will revolutionise the understanding of the Agbada and Akata Plays in this axis,” added Alibe.