By Uche Usim, Abuja

In the last decade, the Federal Government has focused strongly on the gas sector since it holds enormous potential for the country, including creating new industries, boosting cleaner energy consumption and generating huge revenue.

Interestingly, the Nigerian Petroleum Development Company (NPDC) has begun accomplishing its domestic gas supply obligation to the country and getting more value from gas molecules that could have been flared.

This is being done by its Ologbo-based Integrated Gas Handling Facility (IGHF).

Industry experts have repeatedly lamented that gas, despite being one of the hydrocarbons Nigeria has in abundance, has been perennially under-utilised.

To address this challenge, the Group Managing Director of the Nigerian National Petroleum Corporation, Mr Mele Kyari said that Nigeria’s efforts to cement its place on the international gas market was born out of the need to have an energy transition blueprint in line with global demands.

He said that Nigeria already has a solid framework for gas infrastructure expansion within the domestic market.

This, he noted, led to the approval of the Nigerian Gas Master Plan February 13, 2008.

The Master-Plan  is a guide for the commercial exploitation and management of Nigeria’s gas sector.

It aims at growing the Nigerian economy with gas by pursuing three key strategies: Stimulate the multiplier effect of gas in the domestic economy; position Nigeria competitively in high value export markets and ​Guarantee the long term energy security of Nigeria.

Before then, the federal government, in 2005, asked the NPDC to supply 45 million standards cubic per day (mmscfd) of lean gas to the 500 megawatts (MW) Ihovbor power generation company (Genco) in Benin from its oil asset – oil mining lease (OML) 111.

The request was obligatory, and the volume further enlarged to include the supply of an additional 55mmscfd of lean gas to the domestic market through the Escravos Lagos Pipeline System (ELPS).

To meet this obligation and maximise its gas value chain through highly beneficial monetisation models across her assets, the NPDC within the same period created a gas department and assigned it the task of conceptualising and executing the government’s request which implicitly meant that the NPDC take the lead in Nigeria’s plan to end flaring of gas in her oil fields.

The government also had a six-month timeline for the NPDC to begin its supply of gas to Ihovbor Genco, and the NNPC subsidiary moved to meet up with this by engaging Network Oil and Gas Ltd (NO&G) for the lease of a 100mmscfd Integrated Gas Handling Facility (IGHF) and this birthed the Early First Gas Plant (EFG) which was operational until 2018 when it was decommissioned for the construction of the IGHF -subsequently, contract for the construction of the IGHF was awarded in 2015.

Specifically, the IGHF was to help NPDC meet its domestic supply obligation (DSO) from the Oredo field and in the process, ensure complete gas flare-out from there. From the Oredo field, the NPDC was to process over 200mmscfd wasted or flared gas to wealth for about 25 years.

The key value drivers for the gas utilisation projects were simply compliance with the government’s gas flare-out objectives and the presidential directives to supply lean gas to power Gencos and the country’s domestic market; thus, the IGHF became a waste-to-wealth facility converting gas that would have been flared to valuable lean gas from its Ologbo town base.

Now completed in the fourth quarter of 2020, the IGHF is economically beneficial to Nigeria; it ensures that liquified petroleum gas (LPG), propane and pentane are available for Nigeria’s domestic consumption. It dispenses at full throughput about 330 tonnes of LPG per day which is technically equivalent to 16 standard LPG trucks or 20 tonnes, and 345 tonnes or 17 trucks of propane into the domestic gas market.

Built to process over 200mmscfd of natural gas to the standard accepted by the West Africa Gas Pipeline (WAGP), the NPDC’s IGHF is able to deliver processed lean gas to the domestic market through a viable gas spur line to the ELPS.

Its commercial grade LPG, propane, and pentane are recovered for sales while stabilised condensate and produced water are returned to Oredo’s Existing Flow Station (EFS) for crude oil spiking and disposal respectively.

The plant which is designed to run for 25 years has the associated gas from the separator overheads of the EPF 1 & 2 in Oredo flow-station as its feed gas. Similarly, the gas streams from the EPF come into the IGHF manifold in different pressure regimes such as low pressure (LP), medium pressure (MP) and high pressure (HP). The LP and MP compressors boost the LP and MP pressures to the HP compressors’ suction pressure regime before feeding the gas into the HP compressors for compression and delivery to the processing units of the gas plant.

The IGHF’s Plot 1 – dew-pointing and fractionation plant – consists of the inlet system with an IGHF inlet manifold, a LP gas compression system, a MP gas compression system, a HP inlet compression system, and gas dehydration system.

It also has the cryogenic system, residue gas compression system, custody transfer metering system, ethane, propane and butane fractionation system, heating and mechanical refrigeration systems.

There is the flare collection and disposal system, drain systems, corrosion protection system, fuel gas system, chemical injection systems, instrument and plant air system included in the Plot 1, as well as the portable and utility water system, electric power distribution systems.

Safety as usual is equally prioritised at the facility with a fire and gas detection and firefighting system, instrumentation and distributed control system (DCS), emergency shutdown (ESD) system, control room and motor control centres (MCC).

Standard telecommunications systems, warehousing, maintenance workshops, security and office buildings further complement the IGHF Plot 1.

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Effectively, it has six incoming gas feed lines of various sizes and a flange for future Oziengbe field gas hook-up, a residue gas export line that connects to the NIPP/NGC pipeline, stabilised condensate line to Oredo flow station crude oil tanks, produced water line to Oredo EFS produced water disposal system, and a commercial grade propane line to connect the LPG storage and dispensing facility at its Plot 2.

Technology deployed at the IGHF

The NPDC’s IGHF is a Gas Sub-cooled Process (GSP) plant with a dual operational mode capability. This ensures that it can be operated in ethane recovery or ethane rejection mode.

Its initial design was based on the Industry Standard Single Stage (ISS) technology when the emphasis was on lean gas supply to meet the government’s mandate but was later reviewed with the ISS design upgraded to a GSP to meet NPDC’s twin needs of profit making and domestic LPG market supply shortfall make-up.

Further, the GSP technology guarantees that the facility’s inlet gas is cooled against the demethanizer column liquids and the column overhead vapour stream. Inlet gas vapours condensed after being cooled in the gas/gas exchanger are removed in a cold separator and sent to the stripping section of the demethanizer for further separation.

As a process, most of the cold separator vapours are isentropically expanded across the expander end of the turbo-expander unit, which provides the main source of cooling for the IGHF GS unit.

In designing the facility, NPDC recognised the deficit in domestic LPG supply and installed three fractionation towers for the fractionation of the produced Natural Gas Liquids (NGLs) into its constituent ethane, propane and butane.

The fractionation unit comprises the De-ethanizer, De-propanizer and De-Butanizer towers with their respective accessories’ skids. These towers according to design extract ethane, propane and butane from the NGLs. Provision is also made for the mixing of propane and butane to generate LPG.

The ethane product is primarily used to fuel the facility, though a split stream is used to make-up the export lean gas. LPG and propane are each transported via a four-inch pipeline to the facility’s storage and dispensing facilities at Plot 2 for storage and sales.

Condensate from the De-Butanizer bottom is stabilised in the condensate stabilization unit to meet Reid Vapour Pressure (RVP) requirement and then spiked into Oredo flow-stations produced crude for storage and subsequent shipment. Pentane which is gotten from the condensate stabilizer overhead is equally transported to Plot 2 for storage and dispensing.

At full throughput which includes the facility processing 200mmscfd of gas, NPDC’s IGHF is able to yield 82mmscfd of lean gas or methane which is equivalent to 366.5MW of electricity per day. Monetarily, this translates to $205,000 per day or approximately $75 million per year at $2.5 per mscf of gas.

Additionally, 330 tonnes per day of LPG which is about 16 – 20 tonnes LPG trucks per day are delivered from the facility to the domestic LPG gas market, and this yields about N73.6 billion per day or N26.8 billion per year to the NPDC.

Besides these, 345 tonnes per day of propane with a projected revenue of about $107 million per year, 2,600 barrels (bbl) per day of condensate of which 800bbl is pentane and valued at $32.85 million per year are possible from the facility.

In summary, at full throughput and availability, the NPDC is most likely to earn up to $300 million every year from the facility.

Locally, the facility is expected to impact Nigeria’s power sector and domestic LPG market, in addition to progressing the fortunes of its host communities. There are nearly 350 skilled and unskilled personnel that would benefit from the facility.

Already, over 100 persons have gained from its construction through indirect economic activities which include food retail, sand and granite supply, other supply activities, liaison works, hoteling supports, vehicle and machine repair works.

Similarly, another 100 would be required for the daily operation and maintenance of the IGHF. These workers would be drawn from the Nigerian labour market, with emphasis on the host communities.

This thus suggests that NPDC’s foray into gas utilisation will herald good tidings for Nigeria. Through the facility, the country is expected to have more gas for power generation. Considering that upgrades in electricity generation and supply is synonymous with upgrades in economic activities, it is envisaged that industries and small-scale enterprises within the Benin axis will see their production uptime and outputs improve operating costs associated with poor electricity supply substantially cut down.

In specifics, the projected supply of 26, 400 cylinders of 12.5 kilograms (kg) of LPG daily to homes in Benin and its environs, will equally bridge existing supply gaps in the local LPG market. This will potentially force down the price of LPG in Benin and make it affordable to most people thus augmenting the government’s intention to make LPG a preferred domestic fuel source.

In context, this is a huge LPG supply intervention bearing in mind that only about 100, 000 homes in Edo state have gas cylinders. More homes may likely acquire gas cylinders if the price of LPG becomes affordable. This thus means less safety concerns associated with the use of kerosene and bunkered condensates for domestic cooking.

LPG retail business is also expected to pick up, thereby lifting more homes out of poverty.

Considering that Nigeria is reportedly home to about 30 million families, of which only a meagre three million homes have gas cylinders or use LPG for cooking, NPDC’s entry into the domestic LPG market is considered well-timed and a potential game-changer.

This will improve the country’s LPG consumption rate which is reported to be at 3kg per capita, and way below the average per capita consumption of African countries. Additionally, with the market also said to be lucrative with positive growth trajectory, NPDC’s entry with a supply capacity of 120,450 metric tonnes per annum or 20.7 per cent of the country’s consumption means that it will become the second largest supplier after the Nigeria Liquified Natural Gas (NLNG).

This, experts note, comes with robust economic benefits.

According to the World Bank, gas flaring costs the global economy US$20billion in 2018. In Nigeria, PwC estimated that the Nigerian economy lost N233 billion (US$761.6 million) to gas flaring the same year, which translates to 3.8% of the global total cost in 2018.

The percentage of gas flared in Nigeria has been reducing since 2002 and stood at 10% in 2018.