fifth major ExxonMobil startup in 2008 commercializes Nigerian natural gas liquids

Project is also boosting oil production and cutting carbon emissions.

ExxonMobil is adding to the world’s energy supply – not only by finding new reservoirs, but also by making existing ones more productive, while at the same time reducing greenhouse-gas emissions. That’s happening now in the East Area fields of the Nigeria joint-venture concession. The Nigerian National Petroleum Corporation and an Exxon Mobil Corporation affiliate, Mobil Producing Nigeria (MPN), have completed a two-stage development to enhance production from aging fields, reduce flaring and recover high-value natural gas liquids from the gas stream.

The latest development, called the Natural Gas Liquids II (NGL II) project, follows the 2006 Additional Oil Recovery project and completes East Area’s five-year, $3.5 billion investments.

Recently completed work on the NGL II project includes the installation of an offshore gas-processing complex, more than 125 miles of new pipelines and the expansion of Nigeria’s Bonny River Terminal. The new facilities can process up to 950 million cubic feet of natural gas a day, yielding up to 50,000 barrels a day of natural gas liquids.

“This project is aligned closely with Nigeria’s goals of growing reserves, increasing production and reducing flared gas,” says Al Hirshberg, ExxonMobil Development Company vice president for established areas. “The work on the NGL II project includes more than 12 million hours completed by Nigerian workers and local contractors with an outstanding safety performance. We are proud of our accomplishments with this significant project and the contributions it has made to Nigeria.”

The NGL II project continues MPN’s tradition of strengthening and expanding the capabilities of Nigerian companies. Besides using a significant in-country labor force, the project provided an opportunity for Nigerian companies to furnish in-country fabrication, logistics support and other services. These companies were involved in construction of the Bonny River Terminal expansion, installation of pipelines and fabrication of components for the offshore complex.

A key part of NGL II development’s strategy included the use of funding from Nigerian banks. Approximately $220 million of the total project financing was completely arranged through Nigerian banks. This represents the first time a major oil and gas joint venture in Nigeria has completed a financing package exclusively through Nigerian financial institutions.

Although a sizeable part of the total budget was spent in Nigeria, construction was on a global scale, with 10 major engineering or fabrication sites in North America, Europe, Africa and Asia. 

“The sun never set on this project,” says Shuaibu Otori, MPN development manager. “During construction, activities were taking place around the world because of what we were doing here. Concurrently, the project provided excellent training and development opportunities for Nigerians involved in the project.”

The long view

The section known as East Area includes six shallow-water fields in the ancient Niger River delta. When the fields were developed in the 1970s, there was no market for the associated natural gas.

“Over time, we learned more about the reservoirs and ways to maximize the value of the gas,” says Al Short, joint-venture operations manager. “That was the beginning of the East Area gas project.”

The project gathers natural gas from most of the joint-venture area, which includes hundreds of wells encompassing more than 600 square miles of open water. The natural gas liquids – propane, butane and pentanes – are extracted from the rich gas stream and transported onshore by pipeline for fractionation and storage prior to loading onto tankers for sale. The residue gas is reinjected to maintain pressure in the reservoirs and enhance oil production.

In some cases, wells that had stopped producing oil are coming back on stream. The gas that is now injected is preserved and can eventually be recovered and sold. Long term, the project is expected to add 530 million gross barrels of oil and 275 million gross barrels of natural gas liquids to Nigeria’s petroleum reserves and reduce routine gas flaring.

“We are already making a big difference by dramatically reducing the amount of gas being flared,” Short says.

Future capacity

East Area development planners see the potential for even more production from new wells to be drilled in the years ahead. The new infrastructure now in place gives MPN the capacity to develop another 500 million barrels of oil.

“That is in addition to the 530 million barrels of oil reserves that we estimate now,” says Ray Steinmetz, Nigeria joint-venture project executive for ExxonMobil Development Company. “We think we can also recover another 300 million barrels of natural gas liquids from future projects.”

For at least another year, the work will continue to link East Area’s satellite offshore platforms to the central gas-processing system. The project so far has had an outstanding safety record, and all those involved intend to keep it that way.

The challenge is to complete all of the renovation and construction work without affecting operations. “It’s a bit like remodeling your home while you are still living there,” Steinmetz says. “Now the end is in sight. As we upgrade the remaining platforms, we plan to maximize the value from the new gas-processing complex, and we are proud of the reduced flaring we have achieved, with its positive impact on the environment.”