The Utorogu Natural Gas Plant in Ughelli, Delta state, was recently taken over by flood water according to viral videos seen on social media, including Twitter, and verified by Nairametrics. The floods pose a supply risk to the gas supply.
The disruption could also affect the electricity supply in the country as most of the produced gas from the plant goes to the Escravos-Lagos Pipeline System (ELPS), with 30% going to the power plants in the country.
Also, Utorogu Gas Plant supplies gas to the West African Gas Pipeline (WAGP) system. The West African Gas Pipeline Project consists of a 678 km pipeline to transport natural gas from Nigeria to Benin, Togo, and Ghana.
The Utorogu NAG 2 gas processing plant has a total capacity of 150 million cubic feet (mcf) per day.
ND Western, which operates the plant, had projected that by the end of 2022 it will be producing 400 million cubic feet (mcf) per day with plans to increase it to 600 million cubic feet (mcf) per day by 2024. However, this projection may be disrupted by the flooding incident.
More about the Utorogu Gas Plant
The natural gas plant is located in the Otu-Jeremi community in Ughelli South Local Government Area of Delta State.
The plant is in three phases – Utorogu Gas Plant 1 (NAG 1), Utorogu Gas Plant 2 (NAG 2), and the proposed Utorogu Gas Plant 3 (NAG 3) expansion project.
Otu-Jeremi and 47 other communities in Ughelli south LGA are currently underwater. Since last week, thousands of Delta State residents have been registering at internally displaced person camps due to flooding.
The roads between Warri/Ughelli/Patani to Bayelsa State/Rivers State are inaccessible due to flooding, putting an end to commercial/business activities along those roads.
Plant capacity affected by flooding
The Utorogu Gas Plant is a project owned and operated by ND Western, an independent Nigerian oil and gas exploration and production company incorporated on the 20th of April, 2011 as a Special Purpose Vehicle (SPV).
The sole purpose of the SPV is to acquire Oil Mining Lease (OML) 34, a jointly held 45% Participating Interest of the Shell Petroleum Development Company (SPDC) of Nigeria, Total Exploration & Production Nigeria (TEPNG) Limited and Nigerian Agip Oil Company (NAOC) Limited.
OML 34 is located in the Western Niger Delta and covers an area of some 950 square kilometres. The producing fields are Utorogu, Ughelli East, and Ughelli West, with a total flow station capacity of 90 thousand barrels per day (Mbpd).
The block has two gas plants, one in Utorogu field with 360 million standard cubic feet per day (MMscfd) capacity and the other in Ughelli East field with 90 million standard cubic feet per day (MMscfd) capacity.
The combined fields currently produce an average of about 390 million standard cubic feet per day (MMscfd) of gas and 17,000 barrels per day (BPD) of oil and condensate.
ND Western is now the holder of a 45% Participating Interest in OML 34, in an unincorporated joint venture (JV) with Nigerian Petroleum Development Company Limited (NPDC). UPDC holds the remaining 55% interest previously held by its parent company the Nigerian National Petroleum Corporation.
NPDC is the operator of the OML 34 Asset.
Following Shell’s divestment in 2011, ND Western paid $600 million for the gas-rich OML 34, which comprises the Utorogu oil and gas assets. The NAG 2 project costs the sum of $250 million, plus an additional $198 million for engineering, procurement, and construction (EPC) costs. These costs place the current value of the Utorogu Gas Plant at over a billion dollars.
A brief history
- Utorogu field was discovered in 1964 and is located 42 km southeast of Warri.
- It currently produces about 10 Mbpd of oil & condensate and 300 MMscf/d of gas.
- The Utorogu flow station was commissioned in 1968 with a 30 Mbpd processing capacity.
- It currently also has one non-associated gas (NAG) plant of 360 MMscf/d and a field logistics base.
- The station processes fluids from The Utorogu oil wells and condensate from the Utorogu natural gas plant.
- The station also handles hydrocarbon fluid from NPDC’s Abura field and sends high-pressure gas to Ughelli West flow station for gas lifting.
Associated risks with continuous operations
Makon Group is the company responsible for the construction of the 150 mcf NAG 2 project in Utorogu, which was completed in 2017. According to information available on the company’s website, some electrical installations were carried out on the site.
An international oil company engineer told Nairametrics those plant workers are meant to be evacuated immediately after a plant gets flooded because gas plant facilities getting flooded with water will pose electric hazards to staff.
What you should know
Nairametrics had earlier reported that this year, flooding in Nigeria, could result in a decline in Nigeria’s export earnings, which will severely impact government revenues and could worsen the country’s fiscal challenges.
- The Nigeria Liquefied Natural Gas (NLNG) Limited had declared a force majeure on its 22.2 million ton per year Bonny LNG export facility, following supply disruptions caused by flooding.
- Nigeria earned N749.646 billion from the export of liquefied natural gas (LNG) and other petroleum gas products in the first quarter of 2022, according to the National Bureau of Statistics (NBS)
- Authorities have blamed this year’s floods, which have affected 33 states, on water overflowing from some local rivers, unusual rainfalls, and the release of excess water from Lagdo Dam in neighbouring Cameroon’s northern region, which could continue into November.
