Pan Ocean awards multi-billion naira pipeline contract to Nigerian contractor

LagosNigeria’s frontline indigenous oil & gas exploration and production company, Pan Ocean Oil Corporation (Pan Ocean) has given a significant push to the increase of Nigerian content in the oil & gas sector.

Propelled by the need to increase production and  ensure safety of facilities, Pan Ocean, operator of the Nigerian National Petroleum Corporation (NNPC)/Pan Ocean Joint Venture has awarded the contract for the construction of  a sixty seven kilometer Amukpe-Escravos Pipeline Project (AEPP) to Fenog Nigeria Limited, an indigenous company.

The contract which involves installation of 20” pipeline across the 67 kilometers route will have capacity to handle 160,000 barrels of oil per day (BOPD) with remote manifolds to accumulate third parties’ crude oil evacuation to the Escravos.

Commenting on the project, the Chairman and Managing Director of Pan Ocean, Dr. Festus Fadeyi, said: “We admire and appreciate the President, Dr. Goodluck Jonathan for signing of the Nigerian Content Bill into law. The law has become a catalyst for local capacity development and the Amukpe-Escravos Pipeline project reflects Pan Ocean’s contribution to developing indigenous capacity as requires by the Nigerian Content Law.

Dr. Fadeyi further explained: “By awarding the Amukpe-Escravos Pipeline Project to Fenog Nigeria Limited, we have demonstrated our desire for increased participation of Nigerian companies in the oil and gas sector. Fenog is a Nigerian company with local manpower. This contract therefore is expected to serve as a means for local capacity development in keeping with the provisions of the law.

The contract with Fenog further reflects Pan Ocean’s drive towards developing the Nigerian oil and gas sector as it will contribute significantly towards increasing Nigeria’s overall crude export. According to Dr. Fadeyi, “upon completion of the project in 2013, we hope to significantly contribute to increasing Nigeria’s crude exports with its attendant impact on revenues both for the government and other stakeholders”. This pipeline will offer the other operators within that region the opportunity to increase their crude evacuation capabilities.

He also said the contract was awarded after a rigorous and intense bidding process. “We have a high regard for the laws which govern contract award and operations in the oil and gas industry. Hence, Fenog was chosen on the basis of merit and in compliance with the due process regulations of NNPC-NAPIMS, NCDMB, NIPEX and DPR”, he stated.

He added, “We are particularly pleased with the support of our joint venture partner, the NNPC for working with us to conclude the contracting process in a speedy and efficient manner. The contribution and support of Chevron Nigeria Limited in facilitating the right of way is also acknowledged”

In his reaction, Executive Director of Fenog Nigeria Ltd, Mr. Matthew Tonlagha, thanked Pan Ocean for the opportunity given to the company. He said Fenog will deliver the project on expectation to justify Pan Ocean’s confidence as well as underscore the call for increased patronage of indigenous companies by players in the Nigerian oil and gas sector.

Fenog Nigeria Ltd has agreed with Pan Ocean to deploy the Horizontal Directional Drilling (HDD) technology for installation of the pipeline, given its advantage over the conventional open trench method. The HDD equipment will install the pipeline between 6 meters and 45 meters below ground. At this depth the pipeline will be secured from most external interference, including vandalism. Other benefits include the fact that, with HDD, engineering and construction time is reduced; since it does not require the robust buoyancy calculations, concrete coating/curing, and affords the construction team a site that is almost independent of weather conditions. It is noteworthy that Pan Ocean’s choice of HDD installation method for this pipeline will further promote the Nigerian Content requirements because technology transfer is guaranteed. He added that this is the first time in the world that continuous HDD will be used for pipeline installation up to 67 kilometers.

Construction work is expected to commence by the fourth Quarter of 2011 and the project is scheduled for commissioning during the first quarter of 2013.

The pipeline contract is expected to provide job opportunities for youths in the neighboring communities as the majority of the manpower expectedly will come from the host and adjourning communities. This will to a large extent, impact on the internal and external economies of these communities. It is also expected that skills from the highly experienced engineers would be transferred during execution phase of the project.

On completion, Pan Ocean would have successfully increased its production/export capacity; create crude oil evacuation synergy for prospective producers in the area. In general, Amukpe-Escravos pipeline will provide a reliable and efficient speed to market crude oil transport system for crude evacuation.


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