NNPC’s gas handling facility begins operations, reduces flaring

The Nigerian National Petroleum Corporation through its flagship subsidiary, the Nigerian Petroleum Development Company, on Monday announced the commencement of operations at its integrated gas handling facility.

It also announced that with the commencement of operations at the facility, the quantum of flared gas in Nigeria was being reduced, as the IGHF had capacity to convert the commodity to revenue.

The Managing Director of NPDC, Mansur Sambo, told journalists that the gas produced from the facility and sold domestically were paid for in naira, as against what obtained in the past, where gas buyers paid in dollars.

He said, “The project will bring significant change to the income of the NPDC. It will bring significant change to the environment because we are substantially taking away the amount of gas that would have been flared.

“Today we are converting it into naira. You may ask me why naira? We are an indigenous company and we are happy to take naira. Today, naira is even more scarce than the dollar.”

The IGHF, as well as the Liquefied Petroleum Gas Storage and Dispensing Unit in Ologbo, Edo State, are scheduled for virtual inauguration today (Tuesday) by the President, Major General Muhammadu Buhari (retd.).

Sambo stated that although the project would be inaugurated on Tuesday, the NPDC had already commenced operations.

“We are already selling gas and we want to be ahead of our competitors by making it easy for people who lift gas,” he said.

The NPDC boss added, “Before now, most of the gas liftings are from Lagos. So this will ease even the traffic congestion you have in Lagos. For businessmen it will give them a faster turnaround time.”

He said gas produced from the IGHF was also being exported to other countries in West Africa, adding that both the domestic and foreign markets were being served.

Sambo said, “We are exporting to some African countries. The gas we produce is injected into the Escravos Lagos Pipeline. Part of what goes into the ELP is distributed in the domestic market for companies such as the Egbin Power Plant, among others.

“There is a portion of it that goes to the West African Gas Pipeline and the WAGP is actually a customer of the NPDC and so we export some of the gas.”

He added, “Our income is coming in dollars from sales to our neighbours, but the gas we sell domestically is paid for in naira. And NPDC is the largest gas supplier to the domestic market.”

He said only about one per cent of the over 200 million standard cubic feet per day of gas produced in the facility was being flared in the station, while the national average was about seven per cent.

Sambo further stated that most international oil companies operating in Nigeria were seeking for naira than the dollar.

He said, “The return on investment on this project is excellent and it may interest you to know that today, all the IOCs are looking for naira more than they are looking for dollar.

“This is because most of the business you are going to do, such as payment for labour, concrete or any other thing, it’s the naira that you actually need.”

He said the facility had therefore helped in reducing the pressure on the dollar, adding that the sale of gas in naira from the IGHF would boost the country’s foreign exchange reserves.