FrazEnergy Ltd (a subsidiary of Oilserv) and Galileo Technologies recently signed a Final Investment Decision (FID) to unlock the over $20 billion gas infrastructure deficit in the country.
In this interview with Dipo Oladehinde, Obi Okonkwo, the general manager of FrazEnergy Limited, explained how the project will see the development of scalable Liquified Natural Gas, LNG, harnessed from the ND Western marginal field in Delta state.
What is the importance of this Final Investment Decision (FID) agreement between FrazEnergy Ltd (a subsidiary of Oilserv) and Galileo Technologies to unlock the over $20 billion gas infrastructure deficit in the country?
The gas technology project which is to be established in Delta State is expected to convert the gas to liquefied natural gas (LNG), and then sell it to the marketplace. The gas plant would capture what would have been flared gas, and convert those flared gas into natural gas, which would turn into liquefied natural gas (LNG).
The plant would also produce propane, and liquefied petroleum gas (LPG), adding there will be some condensate also.
The company is also developing a 91-kilometer, 18-inch pipeline, with private, built, owned and operated by the company. According to him, the company would not be doing compressed natural gas (CNG) observing an energy density advantage for LNG.
To be fair, the capital requirements for LNG is a little bit more, but we do believe, that because the operational expense is less, because we have less logistics, over time, LNG will win out. It’s a more sustainable business and it’s a marginal field operator”.
“We’ll be building for ourselves and investing in the midstream, downstream sector. So gas processing, gas pipelines, petrol pipelines, petrochemicals, power as a service, anything to do with gas, from source to use, we’ll be participating in.
What does the host community stand to gain by siting the project in this location?
We’ve just recently visited four or five communities that are in the area.
The first thing we must acknowledge is the excellent work Midwestern has been doing in that area within the last decade. We will be building on the success they have done so far by engaging with the communities on the Environmental and Social Impact Assessment (ESIA) study, which we’re completing now.
The host communities are one of our key stakeholders for this project, and we’ll engaging them as much as possible not just for support in terms of the creation of job opportunities but also the necessary support for schools and other sustainable development goals.
What is the degree of local content in this project?
We are prioritising local content as much as possible in this project. The plan is a 10-year project in terms of scale, which will create as many local jobs as possible. We will continue to engage with the community, and hopefully, we can train some young men and women out of the community.
Have you had similar projects in Africa?
Not yet. Galileo is a company that has been in the business since 1980. We started with CNG, developing CNG in South America, then North America, Europe, Asia, and now Africa.
In the region, we have CNG stations in South Africa, virtual pipelines in Mozambique. We have 200 CNG compressors in Egypt. We have a compressor in Cameroon.
We have compressors in Angola, doing gas lifts. But this particular project in Nigeria is the first of its kind in the region where we are going to produce LNG with a very proven technology over the last 10 years.
What’s the impact of this project in terms of solving Nigeria’s issue with gas flaring?
The good thing about the technology is that each of the units will do just under a million cubic feet. So, what that allows us to do is, we can stack them like blocks. This not only allows us to expand in one location but also to be able to move to other locations.
So, to answer your question, one of the things we are working on with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), we are one of the approved technologies for the Flare program that NUPRC has been running. So, one of the things we can do is, we can go to any of these locations onshore or in the swampy areas and put our equipment and then just as required, we can add more modules as required.
Are you targeting the industrial sector in Nigeria or is it for export?
No. This is all going to be for local use. As I mentioned, out of this particular plant, there will be LNG, there will be propane and LPG, all for the local market. Now, with this technology, it’s a liquefaction technology because it makes sense for this location.
As far as energy, for some locations, if it’s close to a pipeline, we will go ahead and treat the gas, and put it directly into the pipeline. But there are so many cases where it’s a small volume.
So, there are many opportunities where the gas site is very remote or the gas is too small that it can’t justify a pipeline. So, at that point, we will be in a position to put in this kind of technology to go virtual.
What are the safety measures put in place?
Safety measures are very simple. Because of the technology, it seems like a compressor. It’s all contained in a single box. So, it’s very easy to maintain the safety measures for the people who operate, the technicians who operate the technology.
And LNG itself is very safe. You can see this in many different media and papers. It’s much safer than CNG in the sense that it’s in liquid.
We are following the general standards of the safety of the compressor industry.
The other major safety point is at an appropriate distance away from the community. That’s the first layer of defence. But on top of that, we have all the necessary regulations. Nigerian Midstream and Downstream Petroleum Regulatory Authority is our regulator. So, we meet all the safety standards.