Chevron to expand Escravos Gas – to Liquid Project

March 01, 2011 | LNG & LPG

Escravos_LPG

Chevron said it would sign an engineering deal in the second quarter for the Phase 3B expansion of  its Escravos Gas Plant. The 33,000 barrel per day (bpd) plant, which is being developed jointly with the Nigerian National Petroleum Corporation (NNPC), will now be completed in 2013, instead of the 2012 earlier set date.

The US oil major had last year put the cost of the Gas- to- Liquid (GTL) project at $5.9 billion last year, a development, which resulted in a face-off between the company and the National Assembly, who  insisted that the cost was unusually high, compared to the cost of same plant built in other countries.

But giving the update on the project in its annual report released at the weekend,  the oil giant said the cost of the plant will rise to $8.4 billion-that is, about $2.5 billion higher than the last estimate given to the lawmakers. The GTL plant originally scheduled to come on stream in 2010 at a cost of about $3 billion is now at 70 percent completion.

South Africa’s Sasol, a 10 percent owner of the plant had confirmed in May that the  plant would not start up until 2013. But the company remains enthusiastic about the project, which it said would allow Nigeria to perform a leading role in an advanced sector of the energy and fuel market.

“The company has continued to follow transparent and world class procedures in all stages of its implementation and the current costs reflect the state of construction costs for similar projects across the petroleum industry globally.” Chevron spokesman Scott Walker said.

The Escravos site is located about 100km southeast of Lagos. The plant will make use of the rich gas resources of the Escravos field, which can now produce 340 million cubic feet of dry gas per day along with 1,200 barrels of condensate and 8,500 barrels of LNG.

The EGTL project was desired to form an integral part of the owners’ overall gas use strategy that includes domestic natural gas sales, regional natural gas sales through the West Africa Gas Pipeline (WAGP), and international sales of GTL products.

In October 2009, the Senate committee on Gas recommended reduction of the cost of project which had escalated to $5.9bn from $1.7bn. The initial estimated cost of the project was revised twice and reached $5.9bn and has been reviewed upwardly to $8.4billion. Due to the increase in costs, the project is now expected to come on stream in 2013.

The GTL plant will be capable of converting natural gas into premium environmentally friendly fuel, diesel and GTL naphtha products. Europe will be the primary market for all fuel products from the Nigerian plant, although some products may be sold in the USA.

The Escravos GTL project will convert over 300 million cubic feet of natural gas a day to GTL diesel and GTL naphtha. It processes about 150 million cubic feet of gas per day and produces LPG for sales to international markets and pipeline quality gas for domestic uses.