Nigeria plans pipeline network to replace FPSOs

Aug 03, 2004 02:00 AM

Nigeria plans to phase out floating, production, storage and offloading vessels used by majors operating in its deepwater region and replace them with a pipeline network on which tariffs would be charged, a senior official at the country's oil watchdog said.
Billy Agha, a director at the Department of Petroleum Resources, told there was no timescale for the plan, though his department intended to consult a Houston-based company about the project. He was speaking on the sidelines of an energy industry conference in the Nigerian capital.

The pipeline network would be owned by an independent company, he said, adding oil companies that operate in the deepwater region would be required to tie into the network and pay a tariff.
"It will also help the government to effectively monitor crude oil production from deepwater oil blocks," Agha added.

The Nigerian government has set a target of raising its crude oil production to 4 mm bpd by 2010, from it current level of about 2.4 mm bpd. Most of the planned increase is expected to come from deepwater projects, where multinational oil companies operate.
Offshore fields include Agbami, being developed by ChevronTexaco, and Shell Petroleum Development of Nigeria's Bonga field. Others are Amenam/Kpono, owned by Elf Petroleum Nigeria, a unit of Total; Abo, owned by Nigerian Agip Oil, a unit of ENI, and Erha, owned by ExxonMobil. Agip and Elf have already deployed their FPSO vessels to their deepwater fields, while others are in the process doing so.

A ChevronTexaco official said an award contract to build an FPSO vessel is expected to be signed during the fourth quarter of 2004. Agha said the switch to a pipeline network would begin with a geographical clustering of FPSO vessels, which would then be connected through the pipeline.
"Through this process, some of the FPSOs will be phased out," he said. Pipeline networks located onshore in Nigeria are objects of vandalism. Deep offshore oil facilities are considered relatively safer given their remote locations. The Department of Petroleum Resources is the regulator for Nigeria's oil and gas industry.

Source: Dow Jones
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