By Onome Amawhe<\/p>\n\n\n\n
A new 67-kilometer-long in Nigeria\u2019s Niger Delta area has begun commercial operation over a decade after construction began. \u00a0The Amukpe Escravos Pipeline pipeline will have the capacity to transport 160,000 barrels per day (BPD) and reduce dependence on existing infrastructure.<\/p>\n\n\n\n
The Niger Delta is both ecologically sensitive and one where oil infrastructure projects often face a number of security challenges. To tackle both of these challenges the new pipeline has been placed between 6 and 45 meters (147.64 feet) below the surface. This deep subterranean installation protects against damage from dredging, ecological damage, and vandalism.<\/p>\n\n\n\n
The project was initiated by Pan Ocean Oil Corporation in 2011 to show the company\u2019s commitment to delivering petroleum to Escravos, with access for tie-ins by oil firms operating in the Western Niger Delta.<\/p>\n\n\n\n
\u201cWe are elated at the success of this project, and we owe it to the many hands who have all helped in some ways to see it through,\u201d says Pan Ocean\u2019s Chief Operating Officer, Olajide Ishola.<\/p>\n\n\n\n
The Amukpe Escravos Pipeline was constructed using a horizontal directional drilling technique, which makes it, safer for operations and also reduces environmental impact.<\/p>\n\n\n\n
\u201cWe are pleased that people who invested in this project will finally enjoy the fruits of their patience and hard work,\u201d said Ishola. \u201cThis kind of initiative has long gestation periods, but in the end, investors gain huge dividends.\u201d<\/p>\n\n\n\n
The commercial launch of the pipeline is a momentous occasion for Seplat Energy, an indigenous oil firm. When the Pan Ocean and NNPC Joint Venture ran out of funds for the 67-kilometer alternative export pipeline in 2019, Seplat Energy stepped in.<\/p>\n\n\n\n
The pipeline was one of three projects that Pan Ocean\/NNPC JV had planned to launch in June 2019. It was placed on hold when the Department of Petroleum Resources, DPR, revoked Pan Ocean\u2019s license on OML 98.<\/p>\n\n\n\n
The construction of the Amukpe-Escravos Pipeline was originally intended to export crude oil from Pan Ocean\u2019s OML 98, but the company\u2019s rights to crude production on the acreage were revoked in April 2019. Concurrently the company lost a license to operate both phases of the Ovade-Ogharefe Gas Processing Plant.<\/p>\n\n\n\n
In a disclosure\u00a0 document seen on the company\u2019s website, the Chief Executive Officer of Seplat Energy, Roger Brown said the Amukpe Escravos pipeline offers \u201ca more secure and reliable export route that will assure higher revenues and profitability for Seplat Energy, enabling us to make a larger contribution to Nigeria\u2019s economy.\u201d<\/p>\n\n\n\n
\u201cWe commend the work that has made this possible and appreciates the efforts of our partners and all contractors involved in creating this more reliable and secure export route for Nigeria\u2019s oil\u201d, Brown added.<\/p>\n\n\n\n
The Amukpe Escravos pipeline connects Seplat Energy\u2019s key oil assets from the oil driller\u2019s Amukpe Liquids Storage Terminal to Chevron\u2019s off-shore Escravos Terminal.<\/p>\n\n\n\n
It can carry 160,000 barrels of oil per day, 35,000 of which are supplied by Seplat Energy and the state-owned Nigerian Petroleum Development Company Limited in a joint venture.<\/p>\n\n\n\n
Seplat had anticipated that the pipeline will be operational by the end of 2019. The COVID-19 epidemic hampered progress, pushing completion and first lifting to the end of last year.<\/p>\n\n\n\n
The Amukpe to Escravos pipeline will offer a third export option for liquids produced at OMLs 4, 38, and 41, in addition to the Trans Forcados Pipeline system and backup export through the Warri refinery.<\/p>\n\n\n\n
Aside from Seplat Energy, other investors and the Nigerian economy would benefit from the asset since it will relieve strain on the 87-kilometer Trans-Forcados Pipeline (TFP), a four-decade-old pipeline system. These companies include NPDC, Enageed, Summit, Newcross Petroleum, Continental Oil & Gas Pan Ocean PSC, and Continental Oil & Gas Pan Ocean PSC, all of which have activities in Nigeria\u2019s midwestern Niger Delta.<\/p>\n\n\n\n
The Trans-Forcados Pipeline has struggled over the previous two decades, with multiple breaches as the infrastructure has become an easy target for criminal groups and vandals attempting to steal crude oil.<\/p>\n\n\n\n
Between February 2016 and early 2017, disruptions on the Trans-Forcados Pipeline forced oil producers to lock in output, causing significant financial difficulties for the Nigerian government and low bottom lines for crude oil companies.<\/p>\n\n\n\n
Total oil was postponed due to the Trans-Forcados Pipeline outage by Pan Ocean alone was 16.2 million barrels of oil in 2006-2007 and 2009. Total oil postponed due to downtime was 3.7 million barrels, in the 2016-2017 period.<\/p>\n\n\n\n
\u201cThe vulnerability and instability of the Focardos pipeline give credence to the project\u2026. The downtime usually experienced by companies that currently use the Focardos pipeline is usually very dire on their financial performance,\u201d says Jubril Kareem, acting Head of Energy Research at Ecobank Transnational, a pan-African lender.<\/p>\n\n\n\n
The deeply buried pipeline project is expected to potentially reduce many of the challenges faced by similar pipelines in the past.<\/p>\n\n\n\n