Royal Dutch Shell, through its Nigerian subsidiary, Shell Petroleum Development Company (SPDC), announced on Wednesday that it has commenced gas production from the second phase of the Gbaran-Ubie project in Niger Delta, Nigeria.
According to the SPDC, the project is expected to produce 175,000 barrels of oil equivalent per day by 2019, though most of that would be in the form of natural gas. The company further disclosed that 18 wells have been drilled and a new pipeline connects it to a nearby plant.
This project is an expansion of the Gbaran-Ubie development, which opened sometime in June 2010.
“Today’s announcement is a positive step for Shell’s global gas portfolio. It is also good news for Nigeria as gas from Gbaran-Ubie Phase 2 will strengthen supply to the domestic market and maintain supply to the export market.” said in a statement by Andy Brown, Shell’s director of exploration and production.
This recent development is good for Nigeria as oil revenue is still her major source of income. At the moment, Nigeria’s maximum crude oil capacity is 2.5 million barrels per day. It is hoped that there will be further reduction in the cost of producing a barrel of oil which now stands at $27 per barrel.
A further addition of 175,000 barrels of oil per day from the Gbaran-Ubie which will mostly will be in the form of gas will increase Nigeria’s supply of gas both locally and internationally.
It is hoped for that by 2019 there will be a sustainable significant increase in gas output and thus result in increased income for Nigeria.
