Royal Dutch Shell to increase gas output by 2019 from its Nigeria Niger-Delta project

Royal Dutch Shell, through its Nigerian subsidiary, Shell Petroleum Development Company (SPDC), announced Wednesday that it has commenced gas production from the second phase of the Gbaran-Ubie project in Nigeria’s Niger Delta.

According to the SPDC, the expanded Gbaran-Ubie development project, which opened sometime in June 2010, is expected to produce 175,000 barrels of oil equivalent per day by 2019, with most of the output in the form of natural gas.

To this end, it is hoped that by 2019 there will be a sustainable and significant increase in gas output, thus resulting in increased income for Nigeria.

“Today’s announcement is a positive step for Shell’s global gas portfolio. It is also good news for Nigeria as gas from Gbaran-Ubie Phase 2 will strengthen supply to the domestic market and maintain supply to the export market.” Andy Brown, Shell’s director of exploration and production said in a statement.

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The company specifically disclosed that 18 wells have been drilled with a new pipeline connecting them to a nearby plant.

Oil analysts see this development as welcoming for Nigeria as oil revenue is still her major source of income. At the moment, Nigeria’s maximum crude oil capacity is 2.5 million barrels per day. It is hoped that there will be a further reduction in the cost of producing a barrel of oil, which now stands at $27 per barrel.

“A further addition of 175,000 barrels of oil per day from the Gbaran-Ubie, which will mostly be in the form of gas, will go a long way in increasing Nigeria’s supply of gas both locally and internationally,” an analyst said.