Nigeria awards $ 660 mm in contracts to extend key gas pipeline

Nigeria has awarded contracts worth naira 78 bn ($ 660 mm) to extend a major trunkline carrying gas from Shell and Chevron oil fields in the Niger Delta to power plants across the country.
Approval of the engineering, construction procurement contract for the second phase of the Escravos-Lagos Pipeline was given at a weekly Cabinet meeting in the capital Abuja, the report said.

"The project will facilitate the expansion of gas supply to the western and northern parts of the country, especially for the supply of gas to power plants and the West African Gas Pipeline," the report quoted the country's Oil Minister Odein Ajumogobia as saying.
"It will also expand the current gas supply from Shell and Chevron through the ELP system. Completion is in 24 months," the minister added.

A decline in gas supply through the ELP pipeline had affected electricity generation by the country's biggest power plant, the 1,320 MW Lagos Thermal Plant, with output currently at 50 % of installed capacity.
Nigeria, with gas reserves estimated at 187 tcf, currently flares more than 40 % of the 2.5 bn cf of gas produced daily. The government launched a new gas policy last February to promote the domestic supply of gas over exports. Oil producers have been directed to divert a percentage of their gas production to the domestic market for use by power and fertilizer plants.

The report also quoted Ajumogobia as saying that the Cabinet had cleared a bill on oil sector reform for submission to parliament.
A government committee on reform in the oil sector submitted its report recently, recommending far-reaching changes in the structure of the state oil company NNPC and the incorporation of the joint ventures with multinational oil companies as limited liabilities.