Monday, February 22, 2010

NNPC wants military to protect pipelines

Rattled by the shortage of gas and the possibility of further shortfall of power generation by 1,000 megawatts from the current 2,7000mw, the Nigerian National Petroleum Corpor-ation (NNPC) has officially requested that the nation's defence forces assist in protecting oil and gas pipelines from vandalism.

Also, the corporation has taken steps to evacuate wet condensate from Shell-operated facilities to the Warri Refinery to prevent the shutdown of gas plants.

THISDAY had last week reported exclusively that Shell warned that if wet condensate estimated at 472, 000 barrels was not evacuated this week, it might be forced to shut down four gas plants in Utorogu, Ughelli, Oben and Sapele.

Damaged pipelines have resulted in the inability of Shell to transmit condensate produced together with gas from these plants to Forcados export terminal.

If the condensate is not evacuated, thermal plants especially Egbin, Omotosho, Geregu, Olorunsogo, Sapele and Delta would be starved of gas supply, worsening the epileptic power supply in the country.

But Group Managing Director of NNPC, Moha-mmed Barkindo, has in a letter to the Minister of Defence, General Godwin Abbey (rtd) explained the urgency in securing pipelines in the Niger Delta in order to save Nigeria from complete blackout.

In the letter dated February 12, 2010, Barkindo said frequent damages to the Trans-Forcados pipeline (TFP) had serious implications on both electricity supply and petroleum products export.

His letter was served to several government officials including Minister of Petroleum Resources Rilwanu Lukman, Minister of State for Petroleum Odein Ajumogobia, Minister of Power Lanre Babalola, Acting President Goodluck Jonathan and Governor of Delta State Emmanuel Uduaghan.

"This is to inform the Hon. Minister of damage to the TFP operated by SPDC. The pipeline which transports crude oil and condensate from various locations in the Niger Delta to the Forcados terminal was attacked and damaged on 7, Feb 2010.

"The Honourable Minister is therefore requested to please note the frequent damages to the Trans-Forcados Pipeline (TFP) and the serious implications it has on the reliable supply of both power and petroleum products to the nation.

"It is therefore requested that appropriate steps be taken to ensure the urgent recovery and security of the pipeline, especially in view of the prospects for disruption to gas supply to Power Holding Company of Nigeria (PHCN) by 21st February 2010," the letter stated.

Barkindo described the TFP as a strategic pipeline for export of crude oil with a capacity of over 400,000 barrels per day to the Forcados export terminal. He added that a shutdown of the pipeline would have a negative impact on the revenue that accrues to the federation.

He noted that in the past, it had been necessary to transfer condensate to the Warri Refinery and Petrolchemical Company (WRPC) tanks for export in order to ensure continuity of gas supply to PHCN. However, the corrosive nature of condensate and the acidic water that comes with it have caused substantial damage to WRPC tanks, he explained.

He said that following the repair of the Escravos to Warri crude oil pipeline, crude had been delivered to WRPC, which had now commenced operations.

"At the same time, crude is being further, transmitted to KRPC for commencement of operations. As a result, WRPC is not able to handle further volumes of condensate from SPDC, as this would otherwise jeopardize the operations of both the Warri refinery and the Kaduna Refinery and threaten the sustainable supply of petroleum products to the nation," he said.

While highlighting the challenges posed by vandals and the inability of the existing security apparatus to protect the facilities, the NNPC GMD regretted that the same pipeline was several times attacked in February 2006, including the crude loading platform.

He said the pipeline remained shut down until January 2008 when SPDC completed repairs and inaugurated the line.

Barkindo further disclosed that the pipeline was again attacked in July 2009 and it took up to 16th November 2009 for SPDC to finish repairs. As the company was about to inaugurated the pipeline, it was again blow-up by dynamite and that particular damage was not repaired until February 4, 2010, he said.

He continued: " Just three days after shell had commissioned the line and successfully pumped water, condensate and crude oil, they discovered on the 7th of February 2010, damage to the pipeline caused by dynamite attack."

Meanwhile, Spokesman of NNPC Levi Ajuonuma said in a statement yesterday that the organisation took practical steps at the weekend to avert imminent blackout with the evacuation of condensate from some Shell-operated facilities to the Warri Refinery to facilitate the production and supply of gas to the thermal power stations.

The evacuation commenced last Friday, he disclosed. He stated that NNPC Group Executive Director, Refining and Petro-chemicals, Mr. Austen Oniwon, had confirmed that two vessels were dedicated throughout the weekend for that purpose.

According to him, this would give SPDC a breather of about three weeks within which additional measures could be taken to improve the situation in the medium term.

"Our next proposal to effectively manage the condensate in the medium term is for WRPC to take on cargo of Forcados blend which we learnt has an API of about 28. We can blend 100 per cent of SPDC's condensate and still make it conform to the process in our plants. With these, we can manage the condensate more efficiently and SPDC can operate its facilities on a more continuous basis," Oniwon explained.

Ajuonuma also disclosed that the NNPC management would on Wednesday meet with top management and technical team of SPDC led by its Managing Director and Country Chairman in Nigeria, Mr. Mutiu Sunmonu at the NNPC Towers, Abuja.

He said: "They would "undertake a review of facilities around the western axis to improve the flexibilities of operations and also create alternatives that will extensively address the vulnerability of the Trans Forcados Pipelines".

"The meeting will also seek solution to the issue of persistent sour water management at Shell's Ughelli facility (an effluent from the production process) which the WRPC has been grappling with after being laden with a 'tankful' from SPDC six months ago," he added.

On the problem of condensate, Ajuonuma explained that the problem "has remained intractable due to the damage of the vital SPDC operated Trans Forcados Pipeline system by incessant militant attacks. The alternative option of transferring condensate through the Ughelli Pump Station, UPS to WRPC is not only unsustainable but is fraught with operational, technical and safety concerns".

Meanwhile, Chevron Nigeria limited has indicated readiness to commence supply of 185 million standard cubic feet/day of gas to power plants before the end of next week.

A source told THISDAY that Chevron gas was initially billed to be delivered in the first week of this month but has been shifted to next week.


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