Presentation on theme: "Paolo LINZI Safety, Environment and Quality VP Eni E&P Division"— Presentation transcript:
1 Paolo LINZI Safety, Environment and Quality VP Eni E&P Division Recovery of Associated Gas for independent power generation The Kwale – Okpai Project NigeriaPaolo LINZISafety, Environment and Quality VPEni E&P Division
2 Background: Flaring down in Nigeria The Kwale - Okpai Project overview AgendaBackground: Flaring down in NigeriaThe Kwale - Okpai Project overview
3 Eni‘s Action Plan on Kyoto Protocol Eni Action Plan for Flaring / Venting reductionR&D activities: CCS Project and GTL pilot projectDevelopment of a sustainable energy model and definition of the transition pathEni has approved a corporate Action Plan on Kyoto Protocol. The paln aims at:Accounting and certificate Eni’s ghg emissionsBeing compliant whith Emissions TradingIdentifying CDM and JI opportunitiesDeveloping a Corporate Carbon Managemet StrategyWorking groups on specific issues have been ideitified.Moreover a R&D programme on Carbon Sequestration has been implemented as wall as actions related to improvement of efficiencyCDM an JI projects identification and a flaring down programme.
4 Flaring Down in Nigeria View of Nigerian flares as seen from the satelliteAn unusual brightness in the dark of the African continentNigeria produces 2.3 M Bopd of oil and 6 BScf/day of associated gas.About 45% of produced gas is presently flared.Gas reserves in the country are estimated to be 180 TcfThe government through fiscal incentives has opened new marketsThe exportation of liquefied natural gas (N-LNG) started in 1999Flaring is a main issue in Nigeria.Currently huge amounts of gas are flared (about 45%) though the government has introduced fiscal incentives for reducing this practive.
5 History of Eni in Nigeria (1) Establishment of “Nigerian Agip Oil Company” NAOC starts exploration activitiesFirst jv with Nigerian government (60% NNPC)Electric power supply to Brass community1980 Establishment of AENR ltdGas re-injection in Obiafu-Obrikon plantNAOC acquires 5% of the Shell assets (increase of about 60,000 bopd equity)1989 Establishment of Nigeria LNG ltd (Agip 10.4%)
6 History of Eni in Nigeria (1) 1994 First NGL supply to Eleme petrochemical1996 Establishment of NAE Ltd1997 Renewal of NOAC jv OMLs until year 20271999 NAOC provides first gas for N-LNG plant2000 NAOC defines a plan to reach “zero flaring”2001 NAOC signs the first electric power sale agreement for the IPP at Okpai2003 Start up of Abo field (first off-shore deep water in Nigeria)2003 Establishment of “Brass LNG Ltd” (Eni 17 %)2005 Start-up of Okpai IPP (first IPP in Nigeria)
7 Relationship With Local Communities Social and Environmental commitment1976: 1st social project – Power supply to Brass Community1985: Reducing gas flaring through gas re-injection1987: Green River social project2000: Start of “zero gas flaring” project2001: Social projects - Roll-back malaria, Burma Rice<5%2009Target
8 Nigerian Zero Flaring Gas Master Plan GAS SUPPLIES(existing and planned)to N-LNG:- Trains 1 & 2- Train 3- Trains 4 & 5- Train 6to Brass LNGto IPP:- Okpai – Phase 1- Okpai – Phase 2 (planned)to Rivers State Gov. Power Plantto Eleme Petrochemical:- Fuel Gas- NGLGAS INJECTION- Kwale field- Ob/Ob fieldINTERNAL CONSUMPTIONSFuel Gas- power generation- gas turbines driversEni has approved a Nigerian Zero Flaring Master Plan.The Plan comprises several measures, both internal end exeternal:External measures: N-LNG trasportation improvement, Power Generation, transportation to Eleme Petrochemical PlantInternal measures: gas reinjection, power generation fuelingEquity shares in the projects:N-LNG Trains: NNPC (60%), NAOC (20%); Phillips Oil Company Nigeria (20%); Train 3 for about ~ 4 mln Ton CO2/year; Trains for about ~ 7 mln Ton CO2/yearOkpai IPP project: NNPC (60%), NAOC (20%); Phillips Oil Company Nigeria (20%)
9 NAOC Gas Configuration Land & Swamp Area IPP projectIPPNAOC Gas Configuration Land & Swamp AreaAKRIKWALEEBOCHAIRRI/ISOKOOB/ OBSAMABRIIDUFORCADOSTUOMOOSHIEELEMEROW GTS - 1 (N-LNG)BENIBOYENAOC’s ROW (OB/OB-Brass)T6P/ HARCOURTOGBAINBIRISPDC’s ROW (Nun river-Kolo creek-Rumuekpe)RumujiThe Kwale Oil-Gas Processing Plant is operated by NAOC and it is situated in the Oil Mining Lease area 60 (OML60), delta State, Nigeria.The Okpai Power Plant, as already said, is 14 km far from Kwale.TIE-IN POINTNAOC/NLNG GTSLegend:CLOUGHCREEKOBAMAOil TerminalROW GTS -4 (N-LNG)LNG TerminalTEBIDABARaw GasBRASSGas Line to BonnyNGLBONNYGas Parallel LineFlowstation UpgradingNew pipelines
10 Background: Flaring down in Nigeria The Kwale - Okpai Project overview AgendaBackground: Flaring down in NigeriaThe Kwale - Okpai Project overview
11 The Project ConceptPURPOSE/ACTIVITYUtilization of previously flared associated gas produced in the Kwale Oil-Gas Processing plantTransportation of the gas through a 14 km long pipelineUse as fuel in plant and in ad hoc built Combined Cycle Gas Turbine Independent Power PlantThe project consists of taking medium and low pressure associated gas trains from the Kwale Oil-Gas Processing Plantwhich were (in absence of any economically viable, commercial outlet) previously flared after separation from oil,and transporting the gas along a pipeline for use in power generation at a high efficiency Combined Cycle Independent Power Plantlocated at Okpai (it is a 480 MW combined cycle gas turbine)
12 On-grid energy installed capacity in Nigeria The project concept results from the analysis of the power genertion and distribution system in Nigeria.The generation plants and the distribution grid are mainly obsolete and often suffer of a lack of maintenance.Hence losses can reach some 40% of the generated electricity.
13 IPP PROJECT PARTNERS TECHNOLOGY NNPC (60%); NAOC (20%); PONL (20%) Project DescriptionIPP PROJECT PARTNERSNNPC (60%); NAOC (20%); PONL (20%)TECHNOLOGYGas dehydration, taking up ullage at the existing Kwale OGPP;Gas compression14 km pipeline inter-connector from the Kwale OGPP to the IPP at OkpaiA 480 MW combined cycle gas turbine power plantThe project involves the use of the following technologies:gas dehydration unit, gas compression unit and a 14 km pipeline inter-connector from the Kwale OGPP to the IPP at Okpai.The participants are the same subject forming the joint venture of the Production Sharing agreement
14 Approved Methodology AM0009 version 02 Methodology OverviewApproved Methodology AM0009 version 02Recovery and utilization of gas from oil wells that would otherwise be flaredThe Methodology ued is AM0009 version 02, the “Rang Dong” (Vietnam) project Methodology.The Methodolody is applicable to flaring down projects under the conditions listed in the slide. Among them it is important to point out the third one: the recovered gas must substitute fuels with equal or higher carbon content. This is the case of the Kwale – Okpai project as in Nigeria the natural gas as a major share in the power generation fuel mix and, moreover, the national strategy to expand power generation outlitnes an increase of gas usageGas at oil wells is recovered and transported via pipelines to a process plant where dry gas, LPG and condensate are produced;Energy required for transport and processing of the recovered gas is generated by using the recovered gas;The products will substitute only the same types of fuels or fuels with a higher carbon content – current electricity generating mix in Nigeria is oil: 6.3%, natural gas: 56.9%; Hydro: 36.8%, and the Nigerian government’s energy strategy outlines plans to increase the use of natural gas in power generation;The substitution of fuels due to the project activity is unlikely to lead to an increase of fuel consumption in the respective market;In the absence of the project activity, the gas is mainly flared.
15 Baseline and Monitoring Plan CO2 equivalent emissions from flaring of associated gas, less:Volume of dry gas exported from Kwale plant to OB/OB gas plantVolume of dry gas used for reinjection at OML 60MONITORINGEx post monitoring of various carbon flows across the gas recovery, processing, export, and emergency relief (flares) systems, plus any accidental releases through plant or pipeline failureThe Project Baseline is the scenario that reasonably represents the anthropogenic emissions by sources of GHG that would occur in the absence of the proposed project. The Baseline it is equal to the emissions deriving from flaring of the amount of gas recovered from the oil wells, reduced of thedry gas exported from Kwale OGPP to Ob/Ob GPP and the dry gas exported for reinjection at OML 60.Monitoring Plan:It involves the application of ex post monitoring of various carbon flows across the gas recovery, processing, export, and emergency relief (flares) systems, plus any accidental releases through plant or pipeline failure.
16 Boundaries and Crediting Period The project boundaries are the Kwale Oil-Gas Processing Plant and the pipeline inter-connector between Kwale OGPP and the IPPCREDITING PERIODA crediting period of 10 years ( ) has been chosenOVERALL CREDITS14.97 Miln tones CO2eqThe Boundaries are the estimated margin around the project, within which the project’s impact (in terms of GHG emission reductions) will be assessed.The CREDITING PERIOD defines the period over which emission reductions of the project can be claimed
17 Additionality assessment In the Project Design Document the additionality demonstration is schematically explained with this table:Because of legal or economic barriers, in the baseline scenario flaring would have been the only option for using such a big amount of gas like the one used to feul the IPP (Independent Power Plant)
18 Emission Reductions over the crediting period: Project EmissionsEmissions from the Kwale gas processing plant that are attributable to the gas trains exporting to the Okpai IPPFugitive and accidental emissions from the transportation of gas to the Okpai IPPEmissions related to the flaring of blow down from the IPP pipelineThe Emissions Reductions are equal to the emissions related to the recovered gas less the project emissionsIn the Project Design Document three contribution to emissions are deemed to occur:1. Emissions from the Kwale Processing Plant related to the gas transportation2. Fugitive Emissions that can accidentally occur along the pipeline3. Flaring of blow down from the Okpai IPP pipelineEmissions reductions are given by the emissions corrensponding to the recovered gas less the 3 contribution due to the ProjectEmission Reductions over the crediting period:14,969,337 tonnes CO2eq
19 Project EmissionsIn the Project Design Document three contribution to emissions are deemed to occur:1. Emissions from the Kwale Processing Plant related to the gas transportation2. Fugitive Emissions that can accidentally occur along the pipeline3. Flaring of blow down from the Okpai IPP pipelineEmissions reductions are given by the emissions corrensponding to the recovered gas less the 3 contribution due to the Project
20 The Clean Development Mechanism ConclusionsThe Clean Development MechanismA help for the Oil &Gas sector in the economic efforts to:Cut flaring and venting emissionDeploy Efficient Technologies in developing countriesThe Kwale – Okpai ProjectA contribution to sustainable development. Its benefits:A significant step to Eni "Zero Gas Flaring" PlanClimate change mitigationDeployment of sustainable technology in NigeriaBoosting CDM projects development in NigeriaNew opportunities to implement flaring down projects worldwideThe CDM can offer significant opportunities to cut the costs related to flaring down programmes. At the same time it can be a tool for deploying new generation technologies in developing countries.The Kwale Project is an example of how to use the opportunities coming from the Clean Development Mechanism for reducing flaring emissions and creating environmentaly friendly development in needy areas like African Countries