Chevron’s $2.7bn Escravos Gas-To-Liquid (EGTL) project in Nigeria remains on track to meet its start-up date and economic viability projections despite recent upward review of the project cost.
Speaking at the ongoing World Petroleum Congress holding in Madrid, Spain, Ali Moshiri as President of Chevron, Africa and Latin America Exploration and Production, noted that having recorded significant progress towards its completion, the EGTL joint venture project would start up in 2011.
The cost of the EGTL which was initially scheduled to come on stream at the end of 2010 was reviewed from $1.7bn to $2.7bn. The upward review of the original cost of the project after the signing of the contract agreement generated controversy, which analysts say contributed to the delay.
The project, when completed will have the capacity to process about 300,000 cubic feet a day of gas into 34,000 barrels a day of GTL diesel.
The EGTL plant which the company jointly owns with the Nigerian National Petroleum Corporation (NNPC) will when completed have the double effect of reducing gas flare and producing low-sulfur diesel fuels for international markets.
The company is already sponsoring 200 Nigerians who will run the plant on a 26-month education and training course at Sasol plants in Sasolburg and Secunda, South Africa.
Moshiri also said the cost of Agbami offshore oilfield which will start pumping oil in the next few weeks compares favourably with the prevailing cost in the industry.
The 800 million barrels reserve capacity oil field located about 70 kilometres offshore is expected to reach its peak output of 250,000 barrels per day within a year of start-up scheduled for 21st July 2008.
Gas-to-liquid (GTL) plants convert natural gas, which otherwise would be flared, from its gaseous condition to liquid. The liquid is broken down to carbon monoxide and oxygen and re-combined to form low-sulphur diesel, or even crude oil.
The GTL industry offers an attractive choice to nations with economically stranded natural gas reserves because it allows them to diversify in the use of their resources. Diversification would allow the country to gain higher rates of return than through a singular investment strategy.
The giant Agbami floating production, storage and offloading (FPSO) vessel arrived at the field in May, with the South Korean-built FPSO one of the largest of its type in the world. It can store 2.2 million barrels of oil in its hull and is designed to pump 250,000 barrels per day from the Agbami field. Agbami is thought to hold reserves pegged at about one billion barrels of oil.