ROYAL Dutch Shell, operator of Nigeria’s largest oilfields, plans to more than double its natural-gas production in Nigeria as it starts a new facility and cuts flaring, or the burning of fuel at fields.
The Hague-based company plans to boost daily output by 1-billion cubic feet within a year from about 700-million, Osten Olorunsola, Shell’s vice-president for gas in sub-Saharan Africa, said at the weekend in an interview in Abuja.
Nigeria, holder of Africa’s largest gas reserves of more than 187-trillion cubic feet, flares most of the gas it produces along with oil because it lacks the infrastructure to process it. Shell plans to collect gas at its Utorogu and Ughelli fields and start the Agbada non-associated gas facilities from the first quarter of next year, Mr Olorunsola said.
“We mop up the gas which otherwise would have been flared and we also make the gas available for power,” he said. “We’re basically using one stone to kill two birds.”
Shell cut gas flaring by 50% in the African country to about 300-million cubic feet a day in the eight years to last year after installing gathering infrastructure, according to the company’s website. The gas gathering project would cost about $6bn when completed, it said.
Shell has about 14 ongoing gas projects, including the integration of the Forcados oil and gas development that will come on stream between the first quarter of next year and 2015, Mr Olorunsola said.
Nigeria is Africa’s biggest oil producer and the fifth-biggest source of US crude imports. Shell operates a joint venture in the country, in which it holds a 30% stake and state-owned Nigerian National Petroleum Corporation owns 55%. Total has a 10% stake and Eni has 5%.
In 2000 the Shell Petroleum Development Company joint venture began a multiyear programme to install equipment to capture gas from its facilities.
According to Shell, factors delaying the programme have included funding shortfalls from Nigerian National Petroleum Corporation; security concerns that meant it was not safe for staff to work in large parts of the Niger delta for long periods of time; and delays in Nigerian National Petroleum Corporation contract approval processes.
From 2000-09 Shell Petroleum Development installed associated gas gathering infrastructure at 33 sites, covering more than 60% of its associated gas production. Eighteen of the facilities were either vandalised or not commissioned because of the crisis in the delta.
Shell Petroleum Development Company earlier this year signed a contract with Saipem Contracting Nigeria for a pipeline system that will gather associated gas currently being flared for use in the domestic gas market.