Stories by John Meze
Total Nigeria Plc, a major international oil and gas company operating in Nigeria, has fingered infrastructure, legal and regulatory framework, commercial framework (pricing policy) as some of the cogs in the wheel of gas monetisation in the country.
The Managing Director and the Chief Exevutive Officer as well as the Country Chair of Total Companies in Nigeria, Mike Sangster, made this revelation at the Management Session of the 37th Nigerian Association of Petroleum Explorationists (NAPE), annual international conference and exhibition in Lagos. He observed that Nigeria needs to address these issues for the gas subsector to achieve the needed result.
Mr. Sangster, added the challenge of funding mechanisms for the sector as investments in PSC oil projects are recovered from oil but no mechanism is currently agreed for cost recovery or profit sharing for investments in gas projects. “However, we are aware that challenges remain in the areas of infrastructure, legal and regulatory framework, commercial framework (pricing policy) via the National Domestic Gas Supply and Pricing Regulations of 2008 vis-à-vis the new National Gas Policy approved by the Federal Executive Council (FEC) in 2017”, he said.
The Total helmsman, who informed that the Total group had been present in Africa for more than 80 years and had been involved in exploration activities in Nigeria for 57 years, stressed that the company had a broad and diversified portfolio in Nigeria, with activities spanning onshore, conventional offshore, deep water and LNG.
The company, he said, had developed a strong partnership with the Nigerian National Petroleum Corporation (NNPC) and other partners.
“Total’s upstream branch plays a significant economic and social role in Nigeria, operating nearly 15 percent of the country’s production. Nigeria, as one of our core areas of activities, is also crucial to the Total Group, accounting for 12 percent of its equity production. In the last five years, Total has invested approximately 10 billion US dollars in the country.”
“Total is proud to be associated with Nigerian Association of Petroleum Explorationists (NAPE), which is the largest professional association of petroleum geologists and related disciplines in Nigeria and indeed Africa. NAPE is a very important part of Total. Our staff have occupied very senior positions of responsibility in NAPE and continue to do so because we identify with the ideals and objectives of this important and strategic professional association.”
“Total shares the concern and commitment of the global community on global warming, which is why Total came up with a strategy to vigorously expand its presence in the gas sub-sector. We believe that natural gas is a growing market of both now and the future. We also already know that natural gas is twice as clean as coal for generating power – so we’re going after it for both environmental and business reasons,” he said.
Mr. Sangster, further informed, that the company has achieved 100 percent gas flare out on Ofon Field in December, 2014 and that the gas is currently monetised at which heels the company’s exploration and production(E&P) arm ,Total E&P, in 2015, received the World Bank – Global Gas Flare Reduction Partnership (GGFR) Excellence Award.
This major milestone, he said, is in line with the aspiration of the Nigerian Government, which is why Ofon flare out achievement has been proposed as part of Nigeria’s Nationally Determined Contribution (NDC) to greenhouse gas emissions reduction.
The Total boss, who said “We are committed to achieving zero flaring in all our operations,” adding “our flagship deep water Egina Field, which came on stream in December last year was also commissioned with zero flare out and has added 10 per cent to Nigeria daily oil production. In fact, since 1999, all Total projects in Nigeria are sanctioned on a no-flaring policy.”
He recalled that in 2016, the NNPC -Total E&P Nigeria Limited joint venture commenced the supply of gas to the Alaoji Power Plant in Abia State while adding that this became possible after the completion and start-up of the Obite-Ubeta-Rumuji (OUR) Pipeline and the Northern Option Pipeline projects by the NNPC/TEPNG JV in August 2016.
The completion of these pipelines , Sangster said, is an important milestone in the activities of Total in Nigeria and that the NOPL is unique and strategic in meeting the Federal Government’s objectives of gas supply to the domestic market.
“Our partnership with the Nigerian Liquefied Natural Gas (NLNG), is well known. We are an NLNG partner with 15 percent stake in the company, which has a liquefaction capacity (Trains 1- 6): 22 MT/Y of LNG.”
” But the planned Train 7 will increase NLNG capacity from 22 to 30 MTPA. Total is committed to the Nigerian Gas Master Plan – reducing flaring and monetizing gas. We are also committed to the supply of additional gas to NLNG train 7 for increase of NLNG capacity. We have signed three Gas Supply Aggregation Agreements (GSAA) and we take our domestic gas supply obligations under these agreements quite seriously,” he said.
Stories by John Meze