• Friday, March 29, 2024
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Eni begins gas, condensate production at Obiafu-41 discovery

Eni-worker

Italian oil major Eni has brought on stream its Obiafu gas and condensate discovery in Nigeria’s Niger Delta, three weeks after well completion, the company said Wednesday.

Production will reach a capacity of about 3 million cubic metres (106 million cubic feet) per day of gas and 3,000 barrels per day of condensate, Eni said in a statement. It said the gas from this block will be used for domestic consumption.

Part of the domestic consumption of gas from this discovery entails processing it at the Eni-operated Ob-Ob plant and then sending it to the 500 megawatts (MW) Kwale Okpai power plant, Nigeria’s first independent power plant. Upgrade for the Okpai plant, which will double its capacity to 1 gigawatt (GW), is currently underway.

“The discovery contains approximately 28 billion cubic metres (Bcm) (988 billion cubic feet) of gas and 60 million barrels of condensate and the gas from this discovery will largely be channelled to the domestic market in order to feed the power sector,” Eni said in a statement.

Eni’s affiliate company, Nigerian Agip Oil Company (NAOC), in which it holds a 20 percent operating stake, alongside state-owned Nigerian National Petroleum Company (60 percent) and Oando (20 percent), made this find in the deeper sequences of the Obiafu-Obrikom fields with the Obiafu-41 deep well in Oil Mining Licence (OML) 61 onshore Niger Delta in August 2019.

Eni’s equity gas production in Nigeria last year was some 92 Bcf (2.6 Bcm), according to the company’s website, or around 5 percent of the country’s total gas output.

In Nigeria, approximately 30 percent of Eni’s gas production is supplied to the domestic market. In 2018, Eni’s equity hydrocarbon production amounted to 100,000 barrels per day of oil equivalent.

Nigeria has the largest gas reserves in Africa and has also made it a priority to unlock and harness its gas potential to increase domestic and industrial power supply.

According to NNPC, Nigeria has around 202 trillion cubic feet (Tcf) of proven gas reserves, a number that was increased from around 187 Tcf late last year, plus about 600 Tcf of unproven gas reserves.

But despite having the largest gas reserves in Africa, only about 25 percent of those reserves are being produced or are under development, according to Shell.

Nigeria is also home to the six-train, 22-million-metric-tonnes-a-year capacity Nigeria Liquefied Natural Gas (LNG) facility whose capacity is set to be raised to 30 million mt per year once a planned seventh train is built at the site.

Other oil majors are also aggressively pursuing gas development projects in Nigeria. Shell Nigeria Gas (SNG), the country’s first and wholly-owned subsidiary of an international oil company involved in domestic gas distribution in Nigeria, increased its gas distribution capacity by over 150 percent following the safe completion of its second gas train, the Agbara-Ota Capacity Increase Project, in June. The facility enables SNG and its partners to achieve regular gas supply to subscribed industries in Ogun State while efforts are on-going to reach more states.

In the past, the entire laws and policies within the Nigerian petroleum sector were technically skewed in favour of oil to the detriment the country’s vast gas resource. But this narrative is beginning to change, although relics of the old regime can still be seen.

Ademuyiwa Adegun, an Abuja-based gas commercial advisor, said the government should realise that it does not have to be a player in the gas sector.

“Until government understands that it needs to be more of an enabler than a player, we will not move forward,” Adegun told BusinessDay.

 

STEPHEN ONYEKWELU