The Amukpe-Escravos Pipeline Project (AEPP) is a 20” X 67km peggable crude oil pipeline stretching from Amukpe to Escravos that will serve as an alternative to the existing Trans Forcados export pipeline. The AEPP has been described as “a viable and more secured export trunk line”.
The pipeline project was conceptualized as a game-changer that will reduce losses arising from pipeline vandalism, thereby boosting revenues to the Nigerian government. The main objectives of the project include: to provide a reliable/efficient speed to the market transport system for crude evacuation; increase export capacity in the region and opportunities for tie in; provide a guaranteed revenue stream for the operator and government; demonstrate a viable alternative to surface export pipeline to tackle intractable oil theft in the region; and provide a secure and uninterrupted production for companies in Western Niger Delta.
“The primary objective of AEPP is to ensure that there is no disruption to crude oil export like the scenario we experienced on the TFP in the past where there was a total collapse of crude export. Nigeria’s experience and history has shown that it is not wise to be highly dependent on a particular source and that is why we have AEPP as an alternative to TFP which has been our major means of exporting crude oil as a joint venture (JV) partner,” said John Okusolubo, Senior Pipeline Engineer and Project Lead, AEPP. Before now, the major evacuation pipeline available to crude oil producers was the Trans Forcados Pipeline. The TFP has a daily capacity of 240,000 bpd, with average daily flows ranging between 200,000 bpd and 240,000 bpd. But it has been plagued by outages and disruptions, making the pipeline unreliable, especially in the creeks and swamps.
The frequent ruptures and disruptions in the TFP owing to the activities of vandals forced oil producers to lock in output. This led to shutdown of the TFP for 305 days in 2016, 182 days in 2017, and more than 60 days in 2018.
Amid its shutdown, Nigeria’s crude oil production fell from 2 million bpd to as low as 1.27 million bpd, costing the country its position as Africa’s number one crude oil producer as it fell behind Angola several times between 2015 and 2017.
The unavailability of the pipeline led to the deferment of an equivalent of $188 million of revenue estimated at $50 per barrel between 2016 and 2017 only, resulting in huge revenue loss for the country, which translated to considerable budgetary strain on the Nigerian government.
In the 2006-2007 and 2009 periods, total crude deferred due to downtime of the Trans Forcados Pipeline by Pan Ocean alone was 16.2mmbbls, an equivalent of $812 million (assuming a price of $50/bbl). The losses applied to most of the crude producers. These crude oil producers are now expected to use the Amukpe-Escravos Pipeline. The contract for the construction of the AEPP was awarded to Fenog Nigeria limited, an indigenous company, by the NNPC/Pan Ocean JV in 2011. The project was initially scheduled to come on stream by early 2018.
The Amukpe-Escravos Pipeline, which comes as a rescue, comprises a 20-inch pipeline covering 67-kilometres route with capacity to handle 160,000 barrels of crude oil per day and with remote manifolds to accommodate third parties’ crude oil evacuation to the Escravos Tank Farm.
In installing the Amukpe-Escravos Pipeline Project, the company used the Continuous Horizontal Directional Drilling (CHDD) method to discourage vandalism and community restiveness along its ROW (Right of Way).
To further forestall the sort of frequent vandalism of the Trans Forcados Pipeline which was laid on the surface, the Amukpe-Escravos Pipeline Project was carefully installed 6m-45m underground to transport crude oil to the export terminal.
Since the AEPP is not prone to high-security risk (vandalism) owing to the pipeline system compared to the TFP, which is exposed on the surface, the pipeline would significantly mitigate loss of revenue to the Nigerian government and oil and gas companies. This is largely because the deep underground installation of the pipeline provides additional protection of the pipeline from other activities including dredging, ecological erosion, farming, among others. Although AEPP is designed to transport crude for Pan Ocean, the plan is to accommodate other neighbouring producers on tariff. This means that third parties, particularly oil companies operating in the Western Niger Delta, will be allowed to convey their crude oil to Escravos through AEPP.
“If you consider the fact that the Trans Focardos Pipeline has suffered so much outages, you will know that an alternative is a welcome development. This pipeline will serve companies including Seplat, NPDC, Enageed, Summit, Newcross Petroleum, Continental Oil & Gas and boost government revenue,” Stanley Mudjere, an energy analyst and lawyer, said in a report.
With the technical start up and unveiling, Pan Ocean now has an alternative line to export its crude and has also created an opportunity for other oil companies operating in the western Niger Delta to export their crude without disruption. This project will help the country to continue to flow its crude and drive the economy forward.