Nigeria Content Online

Nigeria’s
effort at domiciliation of the petroleum industry operations through
the Nigerian content policy appears to be yielding the desired
dividend, as key multinational operators have started deploying locally
manufactured pipes in their fields.

American
energy giant, ExxonMobil, has pioneered the use of made-in-Nigeria
pipes in its operations, with plans to deploy Helical Submerged Arc
Welded (HSAW) pipes fabricated by SCC Pipe Mills for its Usari-Idoho
pipeline replacement project in Akwa Ibom State.

The
pipes will be used for the replacement of the 24-inch oil pipeline
connecting the Usari and Idoho platforms, located in the company’s
shallow water oil fields in water depths of 21 metres.

The
feat, which would pave the way for made-in-Nigeria pipes to be used for
an oil and gas project in the country by any international or local
operating company, is expected to unlock investments in pipe mills and
other oil industry support facilities.

Executive
Secretary, Nigerian Content Development and Monitoring Board (NCDMB),
Ernest Nwapa, said at the weekend at a meeting with representatives of
China’s major welded line pipe maker, Jiangsu Yulong Steel Pipe, led by
its director of sales, M. A. Abbas, that a number of investors have
already firmed up plans to establish pipe mills and related facilities
in Calabar in Cross River, as well as Koko and Gbaran Ubie in Delta
State.

What
is delaying the Final Investment Decisions (FID) of these investors,
Mr. Nwapa said, were concerns by SCC that products from its pipe mill
in the country was not being patronised by the industry.

He
described the use of SCC pipes by Exxon Mobil as a breakthrough in the
implementation of the Nigerian Content Act and a strong signal that
government, assuring that investments in the country’s oil and gas
industry in support facilities, would be protected and patronised.

Nwapa
urged serious investors to speed up the pace of execution of their
projects by taking advantage of the Nigerian Gas Master Plan (NGMP)
infrastructure project and the Calabar-AKK pipeline project being
promoted by the Nigerian National Petroleum Corporation (NNPC) on
behalf of the Federal Government.

Minister
of Petroleum Resources, Deziani Alison-Madueke, said two weeks ago, at
the inauguration of the NCDMB governing council by President Goodluck
Jonathan, that the steadfast implementation of the Nigerian Content Act
would lead to the establishment of three to four new pipe mills and
other ancillary manufacturing plants in the next four years to service
the demands of the industry.

According
to Mrs. Alison-Madueke, the Federal Government’s vision is to retain
over $10 billion out of an average annual oil & gas industry
expenditure of $20 billion in the Nigerian economy, compared to the
current sum of less than $4 billion.

The
Usari-Idoho pipeline replacement project is being executed by Saipem
Nigeria for ExxonMobil, with extensive tests carried out on the pipes
both locally and overseas to confirm that they met all required
technical specifications.

With
the confirmation that the pipes fabricated by SCC met all international
standards, the Executive Secretary pointed out that there was no reason
why other operating companies in Nigeria would not join in sourcing
their pipes from the company and other proposed pipe mills across the
country.

Nwapa
also noted that NCDMB had insisted that any of the proposed Nigerian
pipe mills with the capacity to meet the project schedule of the
Calabar-AKK pipeline project or any other project in the petroleum
industry would be fully utilised before any quantity could be imported.

Although
the SCC pipe mill has a capacity of producing 30,000 tons at a time and
an annual capacity of 100,000 tons, the only order placed in the
factory since it was upgraded was three years ago, with about 6,000
tons by Exxon Mobil in 2007.

Though
Shell Petroleum Development Company (SPDC) and Nigerian Agip Oil
Company (NOAC) are reportedly processing orders for supply of line
pipes from the SCC mill, Mr. Nwapa charged other operators to toe the
same line in order to encourage keen investors to progress their pipe
mill construction.

At
the meeting between NCDMB and representatives of Jiangsu Yulong Steel,
it was gathered that an agreement was reached to set up a joint
NCDMB/Julong project team that will work on the proposed movement of
the company’s 250,000 tons longitudinal submerged arc welded pipe mill
to Nigeria.