Escravos Gas-to-Liquids Project, Niger Delta, Nigeria

Chevron Nigeria Limited (CNL) (75% share) along with the Nigerian National Petroleum Company (NNPC) (25% share) is constructing the 34,000 barrel per day (bpd) Escravos Gas-to-Liquids (EGTL) plant in Escravos, Nigeria (this is expected to be expanded to a 120,000bpd capacity within ten years of completion).

The Escravos site is located about 100km southeast of the Nigerian capital Lagos. The plan will make use of the rich gas resources of the Escravos field, which can now produce 340 million cubic feet of dry gas per day along with 1,200 barrels of condensate and 8,500 barrels of LNG.

With EGTL as the first project utilising its technology and technical expertise, Sasol Chevron will work on the design and development of EGTL and will provide management, operating and technical services to the project owners. Sasol Chevron will also market products from EGTL.

The $1.7bn (N226.1bn) EGTL project will form an integral part of the owner's overall gas utilisation strategy that includes domestic natural gas sales, regional natural gas sales through the West Africa Gas Pipeline (WAGP), and international sales of GTL products.

The proposed GTL plant will be capable of converting natural gas into premium environmentally friendly fuel, diesel and GTL naphtha products. Europe will be the primary market for all fuel products from the Nigerian plant, although some products may be sold in the US.

Although the project is situated in a politically sensitive area, both Chevron and Sasol feel confident of bringing the project to fruition by 2009. Already Sasol and Chevron have sent 200 Nigerians to South Africa on a 26-month training course at the Sasol plants in Secunda and Sasolburg.

FISCHER-TROPSCH AND ISOCRACKING TECHNOLOGY

Sasol Chevron will provide the project with the world-leading technologies of the two companies, Sasol's proprietary Fischer-Tropsch Technology and Chevron's proprietary ISOCRACKING technology.

Sasol is a recognised leader in state-of-the-art Fischer-Tropsch technology and has been actively involved in developing the technology for over 50 years. The ISOCRACKING process is used to upgrade waxy syncrude to yield a lighter premium grade fuel that contains no sulphur or aromatics.

ESCRAVOS GTL PLANT

The Escravos GTL project will convert over 300 million cubic feet of natural gas a day to GTL diesel and GTL naphtha. The GTL plant will be located adjacent to the CNL Escravos Gas Plant – Phase 1 (EGP-1). This plant processes about 150 million cubic feet of gas per day and produces LPG for sales to international markets and pipeline quality gas for domestic uses.

The EGP-1 project, which cost $550m, was completed in 1997. The NNPC/CNL joint venture is currently expanding the gas plant (EGP-2) and plans to construct an additional plant (EGP-3) to ensure sufficient gas supply for the EGTL and the WAGP.

FEASIBILITY STUDIES

A pre-feasibility study in April 1998 started the ball rolling for the EGTL project; this was followed by a more in-depth engineering feasibility study to confirm the design configuration and economics.

After the successful completion of the feasibility study, EGTL entered with Front-End Engineering and Design (FEED) in July 2001. This was completed in 2002. The project will be executed under a lump-sum engineering, procurement and construction contracting strategy and first production is expected in 2009.

The environmental impact and socio-economic assessments were completed and project-critical path site preparation activities commenced in early 2002. The two layers of sand have now been placed on the EGTL project site where the process units are being constructed. Approximately 2,900,000m³ of sand was placed on the EGTL project site.

EPC CONTRACTS AWARDED

In April 2005 the NNPC awarded the contract for the EGTL project to a consortium consisting of JGC of Japan; Kellogg, Brown and Root (KBR) of the US and Snampogetti of Italy.

The GTL plant is designed to process GTL products like low-sulphur GTL diesel, GTL naphtha and Liquefied Petroleum Gas (LPG), and thus eliminate the high incidence of gas flaring in Chevron Texaco's area of operation.

Another key area of the contract involves the construction of a mini refinery to be used for fuelling boats, helicopters, fixed-wing aircraft, drilling rigs and onshore / offshore facilities.

The mini refinery will also service floating petroleum filling stations to be introduced in the Niger Delta region. Julius Berger Nigeria Plc was awarded the contract to build the first six floating stations, which are expected to be completed in 2008.