July 23, 2024

Oil theft: Feed gas supply threatens NLNG train 7, operations expansion plans

Oredola Adeola

The Nigeria Liquified Natural Gas(NLNG) has stated that it is confronted with feed gas supply challenges that threaten its existing operations and expansion plans for Train 7 and proposed Train 8, mainly caused by crude oil theft which affects associated gas supply.

Dr. Philip Mshelbila, Managing Director/Chief Executive Officer, Nigeria LNG (NLNG) made this known when he received Hon. Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), during his visit to the NLNG plant on Bonny Island, Rivers State.

He said,” The biggest challenge with the NLNG, the one that poses a threat not only to our existing operations but also to our expansion plans, is feed gas supply.

“Trains 1 to 6 currently operate at roughly half their potential capacity, a situation that has persisted for some time.

” The main issue behind the challenge is crude oil theft which affects associated gas supply.

“The plant is half-full, not because we don’t have the capacity but because the feed gas is not there.

“We have aspiration for Train 8 but we cannot progress that work because we have no line of sight as to where that gas will come from.

“We believe that the gas can only come from deep water gas but the terms for that must be addressed.

” At present, the Production Sharing Contracts (PSCs) that govern deep-water exploration do not offer commercially viable terms for producers,” the MD NLNG stated.

Dr. Mshelbila further emphasised that concentrated effort on the gas sector is a pivotal starting point for remedying the challenges within Nigeria’s energy sector.

He emphasised that failure to address the root causes of these issues would perpetuate the country’s struggle with energy poverty and result in a significant loss of revenue from the monetisation of valuable resources.

He informed the Minister that Nigeria must be deliberate in its recognition of gas as a transition fuel and the commitment to clean energy to increase its gas investment and harvest the gains from gas.

The NLNG MD said, ” We are on the precipice of achieving a remarkable milestone – a capacity of 30 Million Tonnes Per Annum (MTPA) with our journey to complete Train 7,

“This accomplishment will not only position us as one of the largest single-site operations globally but potentially among the top three worldwide in terms of such capacity at a single site.

“It is an achievement that elevates Nigeria’s standing, placing us among the top six nations in this crucial industry.

“However, the world is evolving at an unprecedented pace, and recent events, such as the Russian/Ukraine conflict, have ushered in a wave of new developments in the LNG sector.

This surge in activity underscores the robust demand for liquefied natural gas, a demand recognized by nations worldwide as integral to the global energy transition.

“Considering these dynamic changes, our position in the rankings is likely to shift rapidly, as other countries make substantial investments in LNG production.

“This is why we believe it is important for us to conclude Train 7 and begin to look beyond that for further expansion.

“Our commitment to harnessing the immense potential of natural gas will not only restore Nigeria’s reputation as a major energy powerhouse but also propel us towards a cleaner, greener future.

“With innovation, collaboration by a wide array of stakeholders, including the government, and unwavering determination, we can shape the energy landscape of tomorrow, driving economic prosperity, creating jobs, and mitigating environmental challenges through gas,” he said.

The Minister of State Gas Resources in his remark stated that NLNG, as a major stakeholder in the gas sector needs all the necessary encouragement to expand.

He emphasised that the expansion of the NLNG is for the good of Nigeria, insisting that the Government must be quick to make these gains in development for the benefit of our future generation.

He said, “NLNG stands as a leading light to the Nigeria’s quest to become an energy-efficient country where clean energy, including gas, utilised.

“All hands must be on deck to stop the loss of revenue in the sector and missed opportunities. The Federal Government is engaging with investors to tap into the huge gas reserves in Nigeria.

“The development of gas is something we should pursue vigorously. The present administration will do everything possible to address the issues,” Hon Ekpo said.

He further promised that the Federal Government will continue to encourage engagements amongst stakeholders to resolve gas supply and security issues and restore plans to compete with peers in the world.