Building A $16b Gas City in Delta State

Building A $16b Gas City in Delta State

Saturday, May 17, 2014 6:52 pm

By Jethro Ibileke

Delta State eyes becoming the industrial base of Nigeria with the planned ground-breaking ceremony of a $16 billion Gas City project to be presided by President Jonathan.

As Nigeria basks in the euphoria of the rebasing which catapulted it to Africa’s largest economy, the country is about to make history again with the ground-breaking ceremony of Africa’s largest gas project, the $16 billion Gas City Project located at Ogidigben in Warri South-West Local Government Area of Delta State.

Governor Uduaghan on tour of the project site

Governor Uduaghan on tour of the project site

Delta State Governor, Dr. Emmanuel Uduaghan, who broke the news recently during an inspection tour of the project site, disclosed that President Goodluck Jonathan would perform the ground-breaking ceremony. “The ground-breaking will take place in the next few weeks. Mr. President will come here to do the ground-breaking. I know it is going to be very soon. They will soon give us a date. We are quite ready,” Uduaghan said.

The Gas City project, according to the governor, is public-private partnership-driven, involving the federal government, a consultium of private investors and the host state, Delta.

He said the gas city being the first in the country, would host three major projects, – a gas processing plant, a fertiliser plant and a petrochemical plant. “There are other projects that will spring up thereafter,” he added.

When completed, the gas processing plant will act as a feedstock to the petrochemical and the fertiliser plants.
“It is a private public partnership between the federal government through the Ministry of Petroleum Resources, working with private investors and of course, the Delta State government also being part of the project as the host state of the project. It is called a Gas City because apart from those three projects there is going to be a big housing estate. There is going to be a deep sea port that NPA is going to construct.”

The first part of the project would be the development of infrastructure. To this end, the state government has allotted a total of 2,800 hectares of land for the project and is ready for preparation. The elated governor explained that “to develop the infrastructure you will first of all prepare the land. Preparation of the land means the bush clearing which has started, again there will be excavation and sand filling”.

He further explained that with the gas city project, Delta State is set to become the industrial base of Nigeria, with multiplier economic benefits ranging from employment generation to providing gas for the nation’s power plants, thereby improving power supply in the country.

He however dismissed media reports insinuating a possible relocation of the project, stressing, “Let me assure everybody that this project is not leaving this site. It has come to stay. Mr. President will come and do the ground-breaking and the other processes will continue.”

Uduaghan informed that the intra-leadership tussle at Ugborodo, the host community, has been resolved and that he would soon inaugurate the committee that would liaise between the federal government and the community on the project.

He appealed to the host community to continue to maintain the peace in the area, noting, “My message always to the community is that what is coming here is unimaginable. What they are even fighting for is just like fighting for crumbs of a bigger pie that is coming. They should look more into the future. What is coming here once it succeeds generations unborn will benefit so much from it.”

Earlier, Tom Grousser, project director of Julius Berger, handlers of the project, had informed the governor that the company mobilised to site in January and has completed 60 per cent of bush clearing, which it intends to complete in August.

The siting of the gas city project at Ogidigben is part of measures by the Delta State government to attract meaningful investment to the state in particular and the South-south region at large. Besides Ogidigben, other communities to benefit from the project include all Itsekiri and Ijaw communities in Delta State and Ilaje in the neighbouring Ondo State. No doubt, the Ogidigben Gas City will help turn the area and the state into a melting pot of business and investment activities and further help the country emerge as a leading player in oil and gas activities in the whole of sub-Saharan Africa.

The project had suffered various setbacks, including unrest from the host community over who gets what from the fallout of the project. Also, delays in the paperwork between the federal government and the contractors had stalled commencement of the project.

At a stakeholders’ meeting he organised to pave the way for its construction in Ogidigben, the governor sued for cooperation from the host communities, begging the youths not to kidnap the contractors, rob or vandalise their equipment.

“The plant,” the governor enthused, “when made functional, will provide employment for more than 200,000 persons/specialists in different skills and professional qualifications,” the governor had assured the people.

Uduaghan described the project as “a blessing to Delta State” and was optimistic that the development will not only strengthen the economy of the state but create thousands of employment opportunities for people in the state and the country at large. He therefore enjoined the people of the area to cooperate with the federal government, the Nigeria National Petroleum Corporation and the expatriate contractors who would handle the project.

The Group Executive Director, Gas & Power, NNPC, Dr. David Ige, during an Offshore Technology Conference in Houston, Texas, United States in May last year, assured that “though this project is late relative to our timing, we are making progress. Our plan is that in the next one month or two, we are going to move to site for site clearing and construction will begin.”

The journey for the commencement of work on the gas city project began many months back.

David Ige, NNPC’s Group Executive Director, Gas and Power, had many months ago announced the siting of the project during the 4th International Conference and Exhibition on Free Trade Zone, held in Lagos, with the theme, The Springboard to Sustainable Economic Transformation of Nigeria. He stressed that the gas industrial park would address many of the present gas deliverability challenges, for which he said critical pipeline infrastructure will be deployed and thousands of direct or indirect jobs delivered.

The initiative presents numerous green choices in the sub-sector and will help operators eliminate the observed negative environmental impact of gas processing and hence, plug huge monies spent on compensations and enhance government revenue.

He said the central processing unit and the fertiliser plant would be ready by 2017. The intention of the project, he insisted, was to have a purpose-built gas industrial city for the utilisation of the country’s gas resources and stimulation of gas-related industries.
Ige mentioned the ease of gas deliverability and at least, three major projects currently on-going in the state quickly comes to mind: the Warri Industrial Park, the Koko Export Processing Zone and the Delta State Independent Power Project, IPP. The gas city is a boost to their successful operations just as other projects within the state that are largely dependent on efficient gas supply.

The spatial network is also available to operators to enjoy global technology and to a wide range of local and international operators to take advantage of its multiplier effects to develop the limitless opportunities across various sectors in the state.

Very importantly, there is need for the host communities, as part of the bottom-up approach, to continue to be involved in the successful realisation of projects and support investment and business activities in their areas.

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