This slides pack, presented by the author in 2009, has been searched online and referenced by many others. It remains relevant to Nigeria today. The essence is to leverage Associated Gas to promote decentralised power generation.

1. 1
RaphAwoseyin@Feb09
Developing Gas and Power Infrastructure:
The Associated Gas Solution
Dr Raphael S. Awoseyin PhD MIMechE FNSE
Chief Engineering and Technology Officer
Oando PLC
Nigerian Oil & Gas Conference
February 2009

2. 2
RaphAwoseyin@Feb09
Outline
• Gas Demand Distribution
• Existing gas infrastructure
• The Dilemma of Gas vs Power
• The Problem with IPPs
• Suggested Steps To Recovery

3. 3
RaphAwoseyin@Feb09
Gas Demand Distribution By Location
Cement
Aluminum
Fertilizer Plant
Methanol
Manufacturing
Domestic Industries
CNG
Power
GTL
Steel
LNG

4. 4
RaphAwoseyin@Feb09

5. 5
RaphAwoseyin@Feb09
Nigerian Gas Master Plan Map

6. 6
RaphAwoseyin@Feb09
Gas Streams
• Non-associated gas (NAG)
• Gas deliberately produced from gas
reservoirs, for defined purpose
• Comes naturally at high pressure, enough to
propel through processing and transmission to
point of use
• Associated gas (AG)
• Gas produced with crude oil. Not intended to
be produced
• Comes at low pressure. Requires compression
to propel through processing and
transmission. Costs 4 times NAG to transmit to
a point of use 100km from source
• Often flared when processing and transmission
to point of need is uneconomic

7. 7
RaphAwoseyin@Feb09
Traditional Utilisation Options for Associated Gas
Tank
Tank
Tank
WATER
OIL $$$
GAS
LIQUID
3-phase
3-phase
3-phase
To LNG
Manufacturing
Power Distribution
POWERGEN
DEHYDRATION
CONDITIONING
ASSOCIATED GAS UTILISATION OPTIONS
OIL DEHYDRATION
AND EXPORT
RE-INJECTION
FROMWELLS

8. 8
RaphAwoseyin@Feb09
The Dilemma
• Transmit gas?
• Pipe the gas to where power is needed and
generate the power
Or
• Transmit power?
• Generate power where you have the gas and
transmit the power to where it is needed.

9. 9
RaphAwoseyin@Feb09
A Further Option for Utilisation Options for Associated Gas
Tank
Tank
Tank
WATER
OIL $$$
GAS
LIQUID
3-phase
3-phase
3-phase
To LNG
Manufacturing
Power Distribution
POWERGEN
POWERGEN
DEHYDRATION
CONDITIONING
ASSOCIATED GAS UTILISATION OPTIONS
OIL DEHYDRATION
AND EXPORT
RE-INJECTION
FROMWELLS

10. 10
RaphAwoseyin@Feb09 Transmitting Gas vs. Transmitting Power
Transmitting Gas: Advantages
Makes the gas available for other
industrial uses besides power
generation
More economic for power
generation far from gas source
(typically beyond 400km)
Transmitting Gas: Disadvantages
Logistics of laying gas pipelines
through complex terrains leads to
longer project times
Encourages over-centralisation of
power generation, with more severe
consequences of single outages
Usually uneconomic for associated
gas utilisation
Transmitting Power: Advantages
Faster execution: An obvious
strategy for “power emergency”
Helps put out flares fast: Convert
low-pressure gas to power and
transmit
Spreads out power generation
thereby improving overall power
availability
Preserves non-associated gas
Transmitting Power: Disadvantages
Does not address other industrial
uses of gas besides power
Economic only up to about 400km
radius, due to transmission losses

11. 11
RaphAwoseyin@Feb09
The Problem with Nigeria’s Power Projects
• Power projects initiated on assumption that fuel gas would
always be there – did not recognise what is involved in getting
the gas “there”
• NGC had a monopoly of gas dealership and distribution,
purchasing gas at imposed low prices from gas producers
• Gas producers stopped developing gas resources
because it was uneconomic; they demanded a
commercial regime
• Government failed to create a commercial regime
to support gas development, and assumed that
threats would force gas producers to continue to
develop gas and sell at a loss
• Power plants were being build but would not
run because there was no fuel gas
• Everyone thought the Power Projects
were a scam!!!!

12. 12
RaphAwoseyin@Feb09
Suggested Steps To Recovery
• Demonstrate to Nigerians that running their diesel or petrol
generators costs several times what public power would cost
at commercial gas prices
• Separate the functions of gas production, transmission and
distribution and deregulate all sectors of the chain
• Create level-playing fields in all sectors for true competition.
The producer must not be forced to sell to the transmitter
• Promote franchising of power generation and distribution to
capable enterprises, starting with captive consumers (for
example, housing estates)
• Decouple utilisation concepts for AG and NAG; emphasise AG
as cheap source for localised power generation
• Promote integration of gas and power businesses: Consider
mandating PHCN to collaborate with associated gas producers
towards decentralised power generation
• Speedy decision is absolutely essential: Endless political
debates are inappropriate for the current situation. Where is
the President’s “War Cabinet” on power?

13. 13
RaphAwoseyin@Feb09
Thank you!!!!