Chevron, NNPC launch Nigeria natural gas initiative

Chevron Corp. and Nigerian National Petroleum Corp. (NNPC) unveiled plans Friday to launch a major initiative to convert Nigerian natural gas into liquid fuels and to significantly reduce the amount of gas being flared in their Nigerian joint venture operations. Under the initiative, $2 billion will be invested in two projects�the Escravos Gas Project Phase 3 and the Escravos gas-to-liquids (GTL) development�both targeted for completion in 2005.


Chevron Corp. and Nigerian National Petroleum Corp. (NNPC) unveiled plans Friday to launch a major initiative to convert Nigerian natural gas into liquid fuels and to significantly reduce the amount of gas being flared in their Nigerian joint venture operations.

Under the initiative, $2 billion will be invested in two projects�the Escravos Gas Project Phase 3 and the Escravos gas-to-liquids (GTL) development�both targeted for completion in 2005.

The Escravos GTL facilities will combine technology from South Africa's Sasol Ltd. and Chevron. (Sasol and Chevron formed a global GTL alliance last year.) Chevron and NNPC will build these projects adjacent to the joint venture's existing operations at Escravos (OGJ, July 31, 2000, p. 17).

The Escravos gas project's third phase will process 400 MMcfd of gas that is currently produced along with crude oil and flared. The plant will extract about 15,000 b/d of NGL and prepare the natural gas for use as feedstock for the Escravos GTL facilities, which will produce about 33,000 b/d of liquid fuels. These fuels will be marketed primarily in Europe, allowing Nigeria to derive revenue from its large natural gas reserves, the eighth largest in the world.

"The gas projects are an integral part of Chevron's growth plans in Nigeria," said Dave O'Reilly, chairman and CEO of Chevron. O'Reilly said the elimination of flaring from Chevron's Nigeria operations would reduce greenhouse gas emissions.

The first phase of the Escravos Gas Project was commissioned in May 1997 and processes about 150 MMcfd of gas for domestic and regional markets. The second phase is expected to come on stream later this year, raising processing capacity to about 300 MMcfd of gas that otherwise would be flared.

Sasol and Chevron announced plans in June 1999 to create a global joint venture company to develop, implement, and operate GTL ventures and market their products (OGJ, June 14, 1999, p. 30). A formal decision to form the venture is expected soon, says Chevron.

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