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President Buhari to inaugurate Ologbo, Edo Gas Plant

Adewale Nurudeen

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President Muhammadu Buhari will conduct a virtual inauguration of the Ologbo, Edo State -based Integrated Gas Handling Facility (IGHF), of the Nigerian Petroleum Development Company (NPDC).

Completed in the fourth quarter (Q4) of 2020, the IGHF is economically beneficial to Nigeria; it ensures that liquified petroleum gas (LPG), propane and pentane are available for Nigeria’s domestic consumption.

The plant dispenses at full throughput about 330 tonnes of LPG per day which is technically equivalent to 16 standard LPG trucks or 20 tonnes, and 345 tonnes or 17 trucks of propane into the domestic gas market.

This revelation is contained in the company’s document titled: “How NPDC is Living out FG’s Gas Aspiration”, as the Nigerian National Petroleum Corporation (NNPC) subsidiary- NDPC disclosed that at full throughput, which includes the facility processing over 200 million metric stand cubic feet per day (mmscfd) of gas, NPDC’s IGHF is able to yield 82mmscfd of lean gas or methane which is equivalent to 366.5MW of electricity per day. Monetarily, this translates to $205,000 per day or approximately $75 million per year at $2.5 per mscf of gas.

In its description of the plant’s commercial benefits, the document said “Additionally, 330 tonnes per day of LPG which is about 16 – 20 tonnes LPG trucks per day are delivered from the facility to the domestic LPG gas market, and this yields about N73.6 million per day or N26.8 billion per year to the NPDC.

“Besides these, 345 tonnes per day of propane with a projected revenue of about $107 million per year, 2600 barrels (bbl) per day of condensate of which 800bbl is pentane and valued at $32.85 million per year are possible from the facility.

In summary, at full throughput and availability, the NPDC is most likely to earn up to $300 million every year from the facility.”

According to the firm, locally, the facility is expected to impact on Nigeria’s power sector and domestic LPG market, in addition to progressing the fortunes of its host communities. There are nearly 350 skilled and unskilled personnel that would benefit from the facility.

In terms of employment, it explained that the plant has already benefited over 100 persons, who have gained from its construction through indirect economic activities which include food retail, sand and granite supply, other supply activities, liaison works, hoteling supports, vehicle and machine repair works. Going forward, another 100 would be required for the daily operation and maintenance of the IGHF. These workers would be drawn from the Nigerian labour market, with emphasis on the host communities, according to the NNPC firm.

This thus suggest that NPDC’s foray into gas utilisation will herald good tidings for Nigeria. Through the facility, the country is expected to have more gas for power generation. Considering that upgrades in electricity generation and supply is synonymous with upgrades in economic activities, it is envisaged that industries and small-scale enterprises within the Benin axis will see their production uptime and outputs improve operating costs associated with poor electricity supply substantially cut down.

In specifics, the projected supply of 26, 400 cylinders of 12.5 kilograms (kg) of LPG daily to homes in Benin and its environs, will equally bridge existing supply gaps in the local LPG market. This will potentially force down the price of LPG in Benin and make it affordable to most people thus augmenting the government’s intention to make LPG a preferred domestic fuel source.

In context, this is a huge LPG supply intervention bearing in mind that only about 100, 000 homes in Edo state have gas cylinders. More homes may likely acquire gas cylinders if the price of LPG becomes affordable. This thus means less safety concerns associated with the use of kerosene and bunkered condensates for domestic cooking.

With the operationalisation of the plant, LPG retail business is also expected to pick up, thereby lifting more homes out of poverty. Besides, considering that Nigeria is reportedly home to about 30 million families, of which only a meagre three million homes have gas cylinders or use LPG for cooking, NPDC’s entry into the domestic LPG market is considered well-timed and a potential game-changer.