The strategic partnership between the Nigerian Content Development and Monitoring Board and Nedogas that led to the completion of the Kwale Gas Gathering appears to be a testimony that the Federal Government is determined to collaborate with stakeholders to end gas flaring in Nigeria, writes DARE OLAWIN
For almost six decades, Nigeria has been flaring gas, unaware of the significant losses it was incurring by wasting this valuable natural resource. Recognising the error of its ways, the government has attempted to implement various solutions to eliminate gas flaring, but unfortunately, these efforts have yet to yield any notable progress. But recently, Nedogas and the NCDMB created a pathway for others to follow with the Kwale Gas Gathering Hub and Nedogas Modular Gas Plant in Delta State.
Located in the Ndokwa West Local Government Area of Delta, the N2bn assets of strategic importance to the nation were inaugurated simultaneously on Thursday, June 6, by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo.
The project, which Ekpo declared open for business signalled the full commencement of operations at the 300 million standard cubic feet per day Kwale Gas Gathering Hub and Nedogas Modular Gas Plant by the project promoter, Nedogas Development Company Limited, a joint venture company between Nigerian Content Development and Monitoring Board and Xenergi Limited, an indigenous company.
According to the Executive Secretary of the NCDMB, Felix Ogbe, the project was the latest in a string of successes recorded by the local content board in strategic partnerships, most notable among which are Waltersmith Petroman Oil Company Limited, owner and operator of the 5,000-barrel per day Waltersmith Modular Refinery located in Ohaji-Egbema Local Government Area, Imo State, and Duport Midstream Company Limited, owner and operator of Duport Energy Park in Egbokor, Edo State.
To the minister and chief executive officers of the federal agencies at the June 6 event, it was an occasion for celebration, as the facilities came on stream, a remarkable milestone in the actualisation of the Federal Government’s Decade of Gas Programme, launched in 2020, and the Nigeria Gas Flare Commercialisation Programme, initiated earlier in 2015.
Okpe said the ceremony was evidence of the local content board’s dedication to creating in-country value through strategic partnerships with indigenous oil and gas companies.
The minister noted that the event represented “a significant advancement in the country’s efforts to promote sustainability, energy efficiency and economic expansion”.
He added that it marked “a major turning point in Nigeria’s continuous quest to use its abundant natural gas resources for the country’s development. It gives us (the Federal Executive Council) immense pride”.
By the reckoning of the Federal Government, Okpe expressed satisfaction that the facilities would solve a persistent environmental issue through the process of capturing associated gas that would otherwise be vented. The process, he noted, turns a potentially waste product into a useful resource.
In a summation of what the KGG Hub and Nedogas Plant mean for the country, the minister said, “A greater supply of gas will boost the electricity supply to industries, improve industrial productivity, and offer more environmentally friendly home energy options. Thus, our people’s quality of life will improve, sustainable development will be promoted, and Nigeria will be positioned as a major player in the world energy market.”
While paying tributes to the agents of what he called an outstanding initiative, Ekpo urged others in the industry to replicate similar projects across the nation.
“The NCDMB and Nedogas Limited, of which Xenergy Limited is a part, deserve praise for their tireless work and steadfast dedication to this admirable cause. Their collaboration serves as evidence of the effectiveness of our local content policy, which seeks to increase the involvement of Nigerian businesses in the oil and gas industry while promoting local knowledge and capability,” he stated.
He said creative engineering and forward-thinking planning on their part, as well as joint public-private sector efforts, had made the accomplishment possible.
Also, the NCDMB Executive Secretary, Ogbe, spoke as industry regulator and chief implementor of Nigerian Content as enshrined in the Nigerian Oil and Gas Industry Content Development Act, 2010. He was categorical about the vision and mission of his agency and the mode of its interventions to advance the objective of local capacity building and utilisation of in-country resources.
He said, “We are proud of the strategic projects we have developed in partnership with other investors in the last 10 years, especially in the gas sector. These projects are geared towards actualising the Federal Government’s policy direction. We would like to emphasise that NCDMB is a business enabler, not just a regulator of local content.”
According to Ogbe, the mandate of the local content board under the NOGICD Act is to promote the development and utilisation of local capacities in the Nigerian oil and gas industry, adding that the facilities would also serve as catalysts for local content development, job creation and a lot more.
Under that mandate, he noted that the board had ensured the utilisation of local capacities on an unprecedented scale in the construction of the Nigeria Liquefied Natural Gas Train 7 project, resulting in 50 per cent domiciliation of the $12bn expenditure.
He revealed that recently the NCDMB teamed up with SEPLAT Petroleum Development Company Limited to build a world-class gas development research facility at Delta State University, Abraka, to develop local capacity.
Ogbe asserted, “We are not just celebrating, we are reaffirming our commitment to the principle of Nigerian Content development. NCDMB will continue to support initiatives that promote local content, drive economic growth and improve the quality of life of all Nigerians.”
Similarly, the Nigerian Gas Infrastructure Company, a subsidiary of the NNPCL, said it was proud of the accomplishment recorded in conjunction with Nedogas and other partners. A representative of the company, Terkula Gberindyer, who is the Manager of commercial and Business Development, expressed excitement that the facility would help in industrialising the nation with natural gas.
“We are particularly excited because of the multiplier effect this facility will have on Nigerians and advancement of Federal Government’s drive to industrialise the nation with natural gas as the major feed,” Gberindyer declared.
The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, stated that Nedogas and its partners had proved to be worthy industry players by the thoroughness with which they executed their project.
A representative of the NUPRC boss, Ogunnubi Olusegun, who is also the Regional Coordinator of the Commission, said, “By pushing the boundaries of energy production capacity, you are setting a commendable standard for others to aspire to.”
The Delta State Governor, Sheriff Oborevwori, who was represented by his Deputy, Chief Monday Onyeme, expressed happiness that his State is playing host to such an important project which would address the energy needs of Nigerians.
He said the economic importance of the KGG Facility and Nedogas Plant would be best appreciated if placed within the context of the energy crisis in the country. Citing World Bank statistics, he stated that power supply is so poor that companies spend as much as $29bn yearly to remain in business, regretting that the country was ranked as the lowest in terms of access to electricity globally.
The Chairman of Nedogas, Emeka Ene, appreciated the partners in the two projects that had contributed to the successes achieved, especially in being able to lead the way to end gas flaring. He was particularly impressed with NCDMB’s strategic capacity development initiatives under successive Managements, from Simbi Wabote to Ogbe.
Ene also emphasised that the KGG Facility and Nedogas Plant are in alignment with the Federal Government’s Decade of Gas initiative which continues to be promoted. He was equally upbeat that the location of the KGG hub, close to the Delta State Industrial Park, would significantly enhance economic activities and development of the State.
Ene remarked that the gas gathering facility located in the heart of the Umusam community, near Kwale, would ensure that “all the stranded gas in the area is harnessed for the benefit of the people”.
On the wider significance of the KGG facility, he noted, “This is a modular plant, it can be replicated 10 times over,” stressing that similar facilities need to be developed to deal with the 140 flare sites in the oil-producing areas.
It was gathered in the company’s brochure that the gas gathering facility would ensure total eradication of flared gas and conversion of an environmental pollutant into products of value.
It will also aid the creation of a strategic gas gathering hub and injection node for quick access to the market for gas owners to monetise gas.
Aside from this, it will also provide an alternative gas supply to the Western flank of the OB3 line to add to the required volumes for the economic sustainability of the line.
In the same vein, it will bring about the contribution of up to $240m per annum to Nigeria’s gross domestic product within the first four years through trunk line tariffs, liquid product sales to off-takers and other infrastructural tariffs and tolling revenue due to the network and trunk line operators.
It will provide a proximal location for gas producers in the cluster to deliver their gas resources via pipeline connections with distances ranging from 3km of Ebendo to 21km of Matsogo.
A professor of Energy at the Lagos State University, Dayo Ayoade, said the initiative is long overdue.
According to Ayoade, the country needs more gas-gathering facilities to put an end to gas flaring, commending the government for the steps taken.
“It is a logical action on the part of the government. Nigeria has burnt away billions of dollars worth of gas over the last 50 years because we didn’t know what to do with it. We must have a gas-gathering facility to ensure that the gas can be utilised for something useful, especially since we have huge energy poverty in our country. It is a good development. But that is just one facility.
“A substantial amount of money has to be invested in more gas-gathering facilities to ensure we maximise the gas resources that we have. It is a good development, just that it has taken too long to achieve.”
The gas gathering hub was borne out of the stranded nature of the associated gas resources in OML 56 producer as there was no evacuation pipeline to link gas resources to the Nigeria gas pipeline network from which such gas could be monetised.
Gas valued at $1.9bn was flared in Nigeria between 2020 and January 2024, according to the Nigerian Gas Flare Tracker.
The Nigerian Gas Flare Tracker stated that during the period under review, 595.1 million standard cubic feet of gas were flared in Rivers, Delta, Imo, Edo, Akwa Ibom, Bayelsa, Anambra, Abia and Lagos States.
The World Bank describes gas flaring as the burning of natural gas associated with oil extraction.
The strategic partnership between NCDMB and Nedogas marks a significant milestone in Nigeria’s quest to end gas flaring and harness its abundant natural gas resources for economic development.
The successful completion of the Kwale Gas Gathering facility and Nedogas Modular Gas Plant demonstrates the seriousness of the government to end gas flaring. With the potential to contribute up to $240m per annum to Nigeria’s GDP and provide a proximal location for gas producers to deliver their gas resources, this project will set a standard for others to replicate.
As the country continues to grapple with energy poverty and environmental degradation, the project offers a beacon of hope for a sustainable future, where natural resources are harnessed for the benefit of all Nigerians.
