• Friday, October 04, 2024
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Seplat delays ANOH plant to 2024 in blow to Nigeria’s gas ambition

Seplat Energy

Pipeline construction delays, poor weather, and insecurity have led to a shift in the completion date of Seplat’s ANOH Gas Processing Plant from the end of this year to the third quarter of 2024. This development could impact Nigeria’s ambitious plan to develop gas locally.

In the company’s newly released third quarter reports, Seplat Energy said progress has been slower than expected, “and our government partner has revised its expected completion time for pipe installation to the end of 2023.

“Based on the progress to date, we believe that Q1 2024 is more likely for a revised completion date. As we have done previously, we believe it is also prudent to allow for an additional margin of error in our planning assumptions of approximately six months. As such, we are revising our first gas target to Q3 2024,” Seplat said.

The government partner is the Nigerian Gas Infrastructure Company (NGIC), a subsidiary of the NNPC Ltd, which is responsible for delivering the pipelines required to transport the gas from ANOH to the demand centres, including the 23km spur line and the Obiafu-Obrikom-Oben (OB3) pipeline.

Read also FG to approve Seplat’s acquisition of $1.3 billion ExxonMobil assets

This delay further complicates Nigeria’s projection that natural gas production would increase from 8.0bcfd in 2020 to 12.2 bcfd. The bulk of this production, about 58 percent is expected to come from Non-Associated Gas reserves driven by onshore developments such as ANOH, Ubeta, and offshore developments to meet demand from Train 7.

The shift in the completion date, the second in just one year, also delays the government’s ambition to shift from an economy based on oil to one determined by gas.

“Our Eastern assets have recently faced higher than usual deferments due to the unavailability of the Trans-Niger Pipeline (TNP), and we factor this into our conservative planning assumptions for ANOH,” Seplat said. This is corporate-speak for attacks on the pipeline where over 460 illegal connections were removed earlier this year.

According to the $20bn ‘Decade of Gas’ plan, between 2020 and 2030, gas demand is expected to grow at a compound annual growth rate of 16.6 percent annually driven by major projects such as NLNG Train 7 in the base case, Nigeria/Morocco pipeline, NLNG Train 8, AKK pipeline-related projects in the high case.

Other projects from which the Decade of Gas was meant to be achieved include Brass Fertilizer and all under-construction power plants. Gas supply for the decade of gas would derive from specific onshore NAG and shallow water AG/NAG development projects.

These were meant to spur the development of other critical projects like the Obiafu-Obrikom-Oben Gas Pipeline designed to transport gas from the Obiafu-Obrikom gas plant in Rivers State to the Oben gas plant in Edo State, the Escravos Lagos Pipeline System Phase II, an expansion project for the existing Escravos Lagos Pipeline System (ELPS) that transports gas from the western Niger Delta to Lagos and other cities in the southwest.

Projects already slated for development like the Assa North-Ohaji South Gas Development Project which will see the development of gas fields in the Assa North and Ohaji South areas of Imo State and Central Processing Facilities (CPF) in OMLs 58, 61, 62, 63 which will develop CPFs in four oil mining leases (OMLs) in the Niger Delta that to help process associated gas produced along with crude oil.

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States

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