SENATE COMMITTEE ON GAS VISITS NNPC, EXPRESSES WORRY OVER BRASS LNG
The Senate Committee on Gas Resources on Monday, 15th February, 2016 visited the headquarters of the Nigeria National Petroleum Corporation (NNPC) to meet with the officials of the corporation as part of its agenda to reposition the gas sector.
Leading the committee on the visit, Chairman, Senate Committee on Gas Resources, Senator Bassey Albert Akpan said the visit of the committee was borne out passion and commitment of the 8th Senate to ensure a repositioning of the gas sector to enable it make a robust contribution to national economic growth. While commending the Group Managing Director and Minister of State for Petroleum, Mr. Ibe Kachikwu and his team for the efforts made so far in restructuring the corporation to enhance delivering of key srategies, Senator Albert said a lot still needs to be done to reposition the sector.
Senator Albert promised the honourable minister who was represented at the occasion by the Group Executive Director, Exploration and Production, NNPC, Dr. Maikanti Baru the support and cooperation of the committee through budgetting and oversight to enable NNPC and its subsidiaries deliver the change agenda of the president.
“There is no doubt in our minds that this is the best time to re-invent ourselves. As Senators, we are very mindful of the responsibilities on our shoulders to achieve a better sectoral standard. This visit will give us benefit of doubt; to get a first hand information about your operations”, he said, adding that members of the committee are here to listen to the presentations by NNPC on the state of the various oil and gas infrastructure projects in order to be properly guided in assessing Joint Venture projects sites during their proposed oversight visits.
Senator Albert and other committee members however demanded explanations on the incredibly slow progress of work on the Brass LNG despite the huge amount of money, put at over $500 million already spent on it even without the project taking off. They expressed regret that two leading partners in the project – Total Oil and ConocoPhillips – have withdrawn their participation in the projects.
The committee also re-iterated its earlier request to NNPC and its subsidiaries to furnish it with details of their remittances into the Federation Account as demanded by Sections 88 and 89 of the 1999 constitution as amended. “In difficult times like this, we need to plug all leakages in this sector. We want to drive the gas sector to its highest level”, Senator Albert said.
Making a detailed presentation of the ongoing gas infrastructure projects in the country to the committee during the visit, the Deputy General Manager, Gas Division, NNPC, Farouk Said, told the committee that the Nigeria Gas Masterplan initiative is aimed at strategically developing the gas industry as a driver towards the nation’s economic growth. The various ongoing gas infrastructure projects, according to him, include the expansion of Escravos Lagos Pipeline system (ELPS 11), which has reached 95.49% completion level; the Obiafu-Obrikom-Oben (OB3) Gas Pipeline Project, which is 71.70% completed; the Trans-Nigera Gas Pipeline Project (TNGP) which cuts across the states of Akwa Ibom, Ebonyi, Edo, Rivers, Abia, Enugu, Kogi and is currently under tender. He said other projects include the Odidi-Warri Gas Pipeline Expansion Project, which is also currently under tender and the massive Gas City and Industrial Park located in Ogidigben in Delta State designed to be the largest gas industrial park in Sub-saharan Africa.
Mr. Said told the committee that when completed, the gas city and industrial park which ground breaking was performed in 2015 by former president, Dr. Goodluck Jonathan, will host the proposed Western Central Processing Facility (CPP), a petrochemical plant, fertiliser plants, other oil and gas based industries and port facilities. He informed the committee that soil investigation, sand search, environmental impact assessment, both offshore and onshore on the project have already been carried out.
In his presentation on the Brass LNG project, the Group General Manager, LNG Division, Yusuf Matashi, informed the committee that the project, which started in 2002 is located adjacent to Nigeria Agip Oil Company’s crude oil export terminal on Brass Island in Bayelsa State. He said the site design of the project has been completed. He disclosed that ConocoPhilips, one of the world’s leading oil and gas exploration and production companies had exited the project while Total oil has also issued a notice of withdrawal from the project. On the way forward, Matashi, who said the sharp decline in oil and gas prices in the international market affected the project, said there was need to evolve a new funding strategy for the project.
However, in his response to the presentations by NNPC officials, Senator Hope Uzodinma, a high ranking senator and member of the committee observed that the engineering designs of some of the projects going on are good, but insisted that business plans of these projects should have been spelt out to determine their profitability. He said a situation where $500 million has already been spent on the Brass LNG project without the project taking off calls for a review of the cost of the project. He was of the view that the project be turned to a petrochemical project.
Meanwhile, the committee will be embarking on oversight visits to some of these gas infrastructure project sites in the next one week.