Shell takes FIDs for Niger Delta projects after pipeline explosion

Shell Petroleum Development Co. of Nigeria Ltd. (SPDC), operator of the Nigerian National Petroleum Corp. (NNPC)/SPDC joint venture (SPDC JV), reported that the group has taken final investment decisions for the Trans Niger Pipeline loop-line (TNPL) and the Gbaran-Ubie Phase Two projects. Both are in Nigeria’s eastern Niger Delta.

Total capital investment of the two bundles of projects is $3.9 billion, SPDC said.

Trans Niger Pipeline (TNP) carries 180,000 b/d of crude oil to the Bonny Export Terminal and is part of the gas liquids evacuation infrastructure, “critical for continued domestic power generation (Afam VI power plant) and LNG exports,” SPDC said.

Explosion, fire at theft point

On June 19, SPDC JV had shut the TNP system following an explosion and fire at a crude theft point on the 28-in. section of the facility at Bodo West in Ogoniland.

Before the incident, SPDC had shut down the 28-in. TNP to remove crude theft connections. It then closed the 24-in. TNP as a precautionary response to the fire, effectively shutting in the entire TNP system and deferring some 150,000 b/d of oil.

“This is another sad reminder of the tragic consequences of crude oil theft,” said Mutiu Sunmonu, SPDC managing director and country chair, Shell Cos. in Nigeria. “Unknown persons continued to reconnect illegal bunkering hoses at Bodo West even as our pipeline team were removing crude theft points. It was therefore not surprising that the fire occurred from the continuing illegal bunkering even as a previous crude oil theft point was being repaired by the team,” he said.

Shell said the 24-in. TNP will be reopened when it is safe to do so, while the 28-in. TNP will remain shut-in until the fire has been extinguished and investigation and damage assessment completed.

Sunmonu said that so far there was practically no spill from this event as the oil is burning off. “What is visible in the water is from an earlier oil spill which was also as a result of oil theft,” he said.

“The explosion also triggered a fire on a nearby barge,” Sunmonu said, adding, “Crude theft continues to pose significant challenges to the people, environment and the local and national economy, and all stakeholders must work together to stop this criminal activity.”

TNPL design, Gbaran-Ubie Phase Two

The design of the TNPL, the system’s loop-line, will include improvements that make the line better protected against theft and sabotage, SPDC reported. Total capital investment for the TNPL project bundle is estimated at $1.5 billion and is proposed to be executed by three indigenous contractors “who have grown steadily over the past 5 years from medium-sized companies to big players in the industry,” SPDC said.

The Gbaran-Ubie Phase Two project, meanwhile, consists of five gas supply and infrastructure projects that are critical for the continued gas supply to the Nigeria Liquefied Natural Gas plant and the Gbaran-Ubie domestic power plant. Total investment for the Gbaran-Ubie Phase Two bundle is $2.4 billion and the project's construction includes local and international companies. The expected peak production from these projects is 215,000 boe/d.

Sunmonu said, “These investments will help to secure energy supplies for domestic and international markets. The TNPL project demonstrates the tangible steps SPDC and its partners are taking to tackle the scourge of criminal activity—pipeline sabotage and crude theft in the Niger Delta, which is the cause of so much environmental and economic damage in this region.”

‘Strategic review’ initiated

Separately, Shell’s wholly owned unit SPDC reported the initiation of what it is calling a “strategic review” of the interests that it holds in selected onshore leases in the SPDC JV. SPDC JV partners are NNPC 55%, SPDC 30%, Total E&P Nigeria Ltd. 10%, and Nigerian Agip Oil Co. Ltd. 5%.

As part of the review, SPDC will initiate a “consultation with partners, and the potential exit from the interests it holds in some further onshore leases in the eastern part of the Niger Delta, subject to partner and regulatory approvals.”

The SPDC JV produced 750,000 boe/d in 2012 from 28 oil-mining licenses (OMLs) across the Niger Delta, both onshore and in the near offshore. “SPDC has been following a strategy of selective divestments of its onshore portfolio, concentrating the operating footprint into a smaller, more contiguous area, while supporting the government’s policy of encouraging investment by indigenous companies in the Nigerian oil and gas industry,” the company said.

Since 2010, SPDC has sold its interest in eight OMLs for a total of $1.8 billion.

Sunmonu further commented, “Nigeria remains an important part of Shell’s portfolio, with clear growth potential, particularly in deepwater and onshore gas. This strategic review marks another step in refocusing the SPDC portfolio.”

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

Quicksilver Canada gets LNG export approval

07/02/2015 Quicksilver Resources Canada Inc. has received approval from the National Energy Board of Canada to export 20 million tonnes/year of LNG from a pos...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected