• Saturday, May 25, 2024
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Crude transport on Nigeria’s biggest oil pipeline ramps up to 200,000b/d


The volume of crude transported through the Trans-Niger Pipeline (TNP) – which is Nigeria’s biggest oil pipeline has, returned to an improved uptime as government’s security measures wade off oil thieves in the oil – rich Niger Delta region.

The improvement has seen crude transported through the pipeline increase to more 200,000 barrels/day in the last 6 months.

Read also:Oil and gas reforms should lead to diversification of the economy – Oteh

It has also ramped up the utilisation of Nigeria Liquefied Natural Gas Limited (NLNG) Trains 1-6 from 57% in 2023 to 70% in Q1 2024.

The TNP is one of Nigeria’s biggest oil pipelines, transporting Bonny Light crude grade from oil fields in the oil-rich Niger Delta region to export terminals.

Run by the Shell Petroleum Development Company and the Nigerian National Petroleum Company Limited (NNPC!), it spans approximately 180 kilometers (112 miles) with the capacity to transport over 450,000 barrels of crude oil per day, contributing significantly to Nigeria’s oil production and export.

But due to incessant oil theft in the region, the pipeline recorded major crude losses for several years. BusinessDay had reported that about 460 illegal connections were removed on the line in April last year, which helped quench huge oil theft.

President Bola Tinubu, in a bid to boost the activities of the Nigerian Petroleum sector, introduced some policy directives which are seen to be yielding results in addressing vandalism of pipelines thereby increasing availability of petroleum Products.

Read also:How Tinubu’s executive orders strike at heart of corruption in Nigeria’s oil sector

Part of the directives was for the National Security Adviser and his Special Adviser on Energy to coordinate enhanced security measures in the Niger Delta.

“Owing to this Directive, the TNP pipeline which had been repeatedly vandalized is now enjoying improved uptime; availability has practically doubled since these directives were implemented,” Olu Arowolo Verheijen, Special Adviser to the president on Energy told a press conference.

“This has translated to increased liquids of over 200,000 barrels/day being transported over the last 6 months. It has increased the utilisation of NLNG Trains 1-6 from 57% in 2023 to 70% in Q1 2024,” she added.

Nigeria’s Oil and Gas sector is critical to its ability to grow low revenues and forex to stabilize weak economy and currency.

However, current oil and gas production and investment levels fall significantly short of potential, as the country, since 2016, has only accounted for only four percent of Africa’s total oil and gas investments, despite possessing thirty-eight percent of the continent’s hydrocarbon reserves.

Read also:Tinubu signs executive orders on oil, gas reforms

Verheijen assured that President Tinubu is committed to turning the tide, with the introduction of fiscal incentives to deepen Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG) penetration.

These incentives, she stated, were designed to ease the impact of fuel subsidies on transportation cost and enable the displacement of PMS/Diesel and; contribute to stabilizing the price of cooking gas in the market and support the transition to clean cooking.

Other policies include, fiscal incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil & Gas Developments, streamlining of contracting processes, procedures and timelines, and local content practice reform, contained in a recent executive order signed by the president.

According to her, the policy directives aim to create clear signal and direction to both market and regulators, in the face of the urgent need to accelerate investments to stabilise the economy.

She explained that the need to fuel economic growth at rates that significantly exceed the nation’s population growth rate has never been more urgent, adding that a private sector-led growth enabled by clear and inclusive government policies is the most enduring path to prosperity for all Nigerians.

“We will sustain engagement and collaboration with key investors to ensure we attract capital and capabilities to this sector to catalyze job creation, productivity, income growth across multiple sectors.

“This administration is laser focused on enabling transformational economic opportunities to lift millions of hardworking Nigerians our of poverty,” she said.

Speaking further, Verheijen stressed on the need to address the fundamental issues in Nigeria’s oil and gas sector, as over 70 percent of the nation’s gas reserve has remained under developed, stalling the Compressed Natural Gas powered vehicles project.

She said, “There are lots of investors who are very interested in making investments in infrastructure, but it’s like building a road without having a car to drive on it. You cannot invest in infrastructure to compress gas if there is no gas.

“We need to address the fundamental issues in the sector so that we can attract capital to the infrastructure and there is no one who is going to invest in midstream infrastructure if they don’t have assurance or line of sight to the attractiveness of gas supply.

“So if the gas suppliers are not making investments because the fiscal terms or the business environment is a very difficult one in which to invest in, then it will be very difficult to continue to mature midstream projects and downstream projects because you have to deal with the Abinitio problem which is gas supply.”