The expected peak production from the projects is 215,000 barrels of oil per day equivalent.
Oil major, Shell, is to invest $3.9billion (about N612.3 billion) in two major gas projects in Nigeria, the company announced on Friday.
Shell Petroleum Development Company of Nigeria Ltd (SPDC), an operator of a joint venture with the Nigerian National Petroleum Corporation (NNPC), said final investment decisions have been reached for the Trans Niger Pipeline loop-line (TNPL) and the Gbaran-Ubie Phase 2 projects, both located in Nigeria’s eastern Niger Delta.
The total capital investment for the TNPL project bundle is expected to be $1.5 billion, while total investment for the Gbaran-Ubie Phase Two bundle is $2.4 billion. The expected peak production from these projects is 215,000 barrels of oil per day equivalent.
The firm’s Managing Director, Mutiu Sunmonu, said the company has taken a “strategic review” of its interests in selected onshore leases in the joint venture portfolio in Nigeria, though he did not name the leases.
“Today’s announcements demonstrate our long term commitment to Nigeria by clearly signaling our intent for the strategic direction of Shell in Nigeria,” Mr. Sunmonu said.
The Trans Niger Pipeline (TNP), which has capacity to convey about 180,000 barrels of crude oil per day to the Bonny Export Terminal, is part of the gas liquids evacuation infrastructure being developed by the company.
The pipeline is of strategic significance to the country, particularly as it is a critical facility for the continued supply of gas to some power plants, for example, the Afam VI power plant, for domestic power generation and liquefied gas exports.
With sections of the TNP facility coming under increased attacks and sabotage by armed militants in the Niger Delta responsible for crude oil theft, officials said it became necessary for the pipeline to be redesigned, to improve its safety and ensure that it was better protected against sabotage.
The initiative, which involves removing the pipelines and re-buring them in new depths that would be difficult to reach by vandals, is expected to reduce pollution related to criminal activities, which was a key aspect of the 2011 United Nations Environment Programme (UNEP) report on Ogoniland.
The Gbaran-Ubie Phase Two project consists of five gas supply and infrastructure projects, which are critical for the continued gas supply to the Nigeria Liquefied Natural Gas (NLNG) plant and the Gbaran-Ubie domestic power plant (IPP).
“These investments will help to secure energy supplies for domestic and international markets. The TNPL project demonstrates the tangible steps SPDC and its partners are taking to tackle the scourge of criminal activity – pipeline sabotage and crude theft in the Niger Delta, which is the cause of so much environmental and economic damage in this region,” Mr Sunmonu said.