Shell restates commitment to developing gas for domestic use in Nigeria

The Managing Director of Shell Nigeria, a subsidiary of Royal Dutch Shell Plc, Mr. Osagie Okunbor, said, yesterday, that the company was ready to explore natural gas to make Nigeria a hub for domestic consumption and export for prospective investments.

Okunbor, in a statement in Port Harcourt, reiterated the company’s commitment to developing gas for domestic use.

He said: “Our strategy is to invest a lot more in gas for domestic consumption and export. We want to grow our deep water and constrain our onshore oil production.

“Shell’s flagship project would be the Gbarain-Ubie project, which will increase gas supplies to the Bonny liquefied natural gas export terminal. A first phase began production in 2010.“

Shell has been divesting onshore oil-producing assets for the last few years and completed another set near the end of March.

The sales are part of an effort to move away from onshore oil projects in Nigeria, which are plagued by industrial scale theft, security problems and pipeline spills, which have become a growing legal liability.

Bonny Island, which is situated at the southern edge of Rivers State, near Port Harcourt, is Nigeria’s only liquefied natural gas export terminal.
This was even as Ghana Gas Company had, a couple of days ago, recorded an improvement in its gas supply and the excess of over 140 million standard cubic feet of gas per day, which makes it the country’s highest reserves since 2009.

The report added that this development could be best attributed to supply from Nigeria.

The report said it is happening after a year’s breakdown of gas supply from Nigeria to Ghana, Togo and Benin, due to pipeline damage by a vessel in Togolese waters.

The company had said its gas supply was barely up to 50 percent of the required expectation, and when supply recommenced after the pipeline was fixed, there was still no improvement for quite a while until lately, when the volumes being supplied to Ghana dropped to a record low level between 30 million and 50 million standard cubic feet per day, making it knotty for the solely gas-reliant Sunon-Asogli Power Plant at Kpone near Tema (200 megawatts) to continue.

At the inception, when the West African Gas Pipeline started delivering gas, Volta River Authority, VRA, was unable to consume all the incoming gas and, perhaps, now more than ever, the stretch of the pipeline between Tema and Takoradi is being utilized.

Gas from Nigeria has been going to Takoradi due to increased volumes and due to challenges with Ghana’s own gas on the FPSO Kwame Nkrumah.

In a statement from Mr. Kofi Ellis, Business Development Manager of the VRA, to business newspapers on the sidelines of the Ghana Gas Forum in Accra recently, he said: “Currently, we are getting in excess of 140 million standard cubic feet per day of gas from Nigeria.”