NIGERIA - Big Gas Projects.

With Chevron estimating associated and free gas reserves in its 2.2m acre areas at 17 TCF, the $569m Phase-I of the Escravos gas gathering project (EGP-1) came on stream in late April 1997. This has put out three flares at the offshore Okan and Mefa fields, reducing the amount of flared gas by 40%. It has materialised after three decades of study, negotiations and arguments. Now Chevron is proud of its good environmental impact on the Niger Delta. The system includes offshore gathering and compression facilities, a gas pipeline to onshore power stations, and a floating LPG storage/offloading vessel which is the first of its kind in the world. About 150 MCF/d of associated gas is compressed and piped to an onshore fractionation plant on stream since 1998 near the Escravos terminal, where a pipeline reaches the Lagos market. The Escravos-Lagos pipeline, through which Shell has raised sales considerably, has a capacity of 600 MCF/d.

The system's output consists of 7,000 b/d of LPG, 12,000 b/d of oil and condensate, and about 130 MCF/d of methane. The LPG has been exported directly since July 1997. The condensate and oil are blended with the Escravos crudes. The methane is bought by NNPC's Nigerian Gas Co. (NGC), which supplies it to power and industrial plants in Lagos. Chevron's system has spare capacity which could be used to reduce gas flaring at other nearby fields and to increase supplies to NGC. Chevron is committed to end flaring by 2006, but this will require a major investment and NNPC has had problems in meeting its share of the funding.

Phase-2 of the EGP (EGP-2), which processes an additional 135 MCF/d of natural gas, began operations in late 2000. The gas is currently used domestically. But gas from EGP-2 also will be exported to Benin, Togo and Ghana through the West African Gas Pipeline (WAGP).

Phase-3 (EGP-3) will increase gas processing to 400 MCF/d. Gas from EGP-3 will feed a $1.3 bn Escravos gas-to-liquid (EGTL) plant, scheduled to come online in 2005. EGTL will use technologies developed by ChevronTexaco and South Africa's Sasol, and will produce nearly 35,000 b/d of synthetic fuels (diesel, kerosene, jetfuel & naphtha) which are sulphur and particulate-free. EGTL's capacity can be expanded to 120,000 b/d.