Shell, Seplat on course for gas expansion

Super oil major Shell and Nigerian independent producer, Seplat Petroleum are both on course to expand gas projects in Nigeria.

Super oil major Shell and Nigerian independent producer, Seplat Petroleum are both on course to expand gas projects in Nigeria.

Shell has initiated a bid process comprising engineering and construction work on its major HA gas project off Nigeria, which is set to involve a significant three-platform complex in shallow water linked to floating storage and offloading vessel.

The Anglo-Dutch giant aims to take a final investment decision on the HA project in the fourth quarter of 2020 or earlier, with first gas due to flow in 2023 or 2024 at up to 250 million cubic feet per day.

In addition, the development in oil mining license (OML) 77 will produce about 30,000 barrels per day of oil and condensate.

For Seplat, despite lower gas prices, it recorded gas tolling revenues of $67 million from its sole risk funded Oben Gas Plant 375 million cubic feet per day expansion between June 2015 and the end of 2018, while posting additional gas sales of $72 million in the first half of 2019.

While the Oben gas processing hub is expected soon to handle some 400 million cubic feet per day (MMcfd) on “a consistent basis” from the Oben and Sapele gas fields, the proposed Assa North-Ohaji South (ANOH) processing hub for tapping unitized gas reserves in OML 53 and OML 21 is targeting 300 MMcfd of first phase gas by the first quarter of 2021.

Work on the first of four Sapele Shallow wells started last month, to be brought on-stream in the fourth quarter while the remaining three wells will be batch-drilled this year with hook-up and production expected in early 2020.

Furthermore, Shell Petroleum Development Company (SPDC), the lead party in a joint venture with state-owned Nigerian National Petroleum Corporation, Total and Eni — is pre-qualifying players to participate in a design contest covering pre-front-end engineering and design work.

After submitting responses by 19 August, contractors who are chosen for and come through a pre-FEED competition will then undertake FEED studies and will later be involved in project execution.

Shell’s schedule calls for pre-FEED and FEED to be completed by the second quarter of 2020 ahead of a final investment decision.

The supermajor said it will only consider companies that have worked on engineering, procurement, and construction in a similar environment and with a similar work scope, adding that these contracts must have had a headline size of at least $600 million.

“Tenderers without demonstrable experience covering the entire chain of activities from pre-FEED through FEED and to full execution will not be considered,” according to SPDC’s pre-qualification documents.

In 2018, the Nigerian National Petroleum Corporation signed agreements on the Seven Critical Gas Development Projects.

The projects were projected to bring 3.4 billion cubic feet per day of gas in line by 2020. DeltaAfrik and Worley Parson, as well as Crestech with Penspen, were hired as project management consultants.

NNPC said, “the projects would not only bridge the projected shortfall in supply upon completion but would also signal the beginning of the process of closing the demand-supply gap in the domestic gas market.”

The projects included the 6.4 trillion cubic feet (tcf) unitized gas fields of Samabri-Bisseni, Akri-Oguta and Ubie-Oshi; development of the 4.3tcf Assa North/Ohaji South field; and the development of NPDC’s OMLs 26, 30 and 42, with 7 tcf.

Others are 2.2 trillion cubic feet (tcf) Shell Petroleum Development Company gas supply to Brass Fertilizer Company, the cluster development of the 5tcf OML 13 to support the expansion of Seven Energy Uquo Gas Plant and the cluster development of the 10tcf Okpokunou/Tuomo West in OMLs 35 and 62 are also part of the initiative. Partners include Shell Petroleum Development Company, Seplat Petroleum Development Company, and Oando.

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