Shell Petroleum Development Company of Nigeria Limited (SNEPCO) has loaded the first crude cargo from Nigeria’s new onshore Otakikpo terminal, marking the start of exports from the $400 million facility.
A report from Argus on Monday indicates that the terminal, developed by marginal field operator Green Energy International, is located in the OML 11 block southeast of Port Harcourt, and has a maximum export capacity of 360,000 barrels per day. Crude is piped 23km via a 20-inch line to a single point mooring in the Atlantic, where a 21m draught allows Aframax and Suezmax tankers to load.
According to the field operator, the terminal replaces a costly barging system that previously cost around $120,000 per day to evacuate production. It said this will reduce the industry’s soaring crude oil production costs are poised to drop by at least 40 per cent.
Commenting on the company’s E&P feat, Managing Director of Otakikpo Oil Terminal, Kayode Adegbulugbe, stated: “The government needs to realise that instead of spending on multiple float stations, this facility offers a home-grown alternative. When oil is stored in tanks, it lowers the cost of production per barrel significantly.
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“The operational expenditure is also set to reduce when they are stored in tanks, and the cost of production per barrel will reduce. This facility will ensure that the costs will drop by at least 40 per cent”, he added.
Previously, the company had exported its light sweet Otakikpo crude via the Ima floating storage unit operated by local firm Amni.
Green Energy projected that the new facility could unlock stranded output from more than 40 nearby fields with a combined capacity of 200,000 b/d and estimated reserves of 3bn barrels of oil equivalent, according to Green Energy. The terminal can receive up to 250,000 b/d from third-party producers, including via a 6-inch, 6km offshore pipeline, the firm said.
The company plans to develop a gathering system for crude from other producers and expand storage capacity to as much as 3mn bl, up from 750,000 bl currently.
The terminal operator told members of the Independent Petroleum Producers Group last week that it can add tank storage within nine months if demand rises. Current utilisation remains below 12pc.
It commenced injecting crude into the terminal on 30 March. Shell loaded the first cargo aboard the Aframax tanker Lipari.
Available data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that Green Energy’s crude output averaged just 5,000 b/d in April, but the company has secured regulatory approval to raise production to 30,000 b/d under a revised field development plant
