Southfield Petroleum Partner CMEC on development its $250Million flagship project

Southfield Petroleum Limited, an indigenous Oil and Gas company that engage mainly in gas processing has commenced the development of its $250Million flagship project at Utorogu.

The firm on November 16, 2016, signed a turnkey $198Million Equipment, Procurement and Construction (EPC) agreement to construct a 250MMScfd gas processing facility with China Machinery Engineering Corporation (CMEC). The agreement was signed during CMEC visit to Southfield Petroleum in Abuja.

Southfield Petroleum Managing Director, Dr. Patrick Ndiomu, received the CMEC team, led by its Group Vice President, Jin Chunsheng, before visiting the Minister of Petroleum, Dr. Ibe Kachikwu and the Group Executive Director, Upstream of NNPC, Bello B. Rabiu.

Prior to signing the agreement, Southfield Petroleum had received an approval from the federal government to construct a gas processing plants on a build, own and operate basis in April 2009, which saw it executing a gas processing agreement with the Nigerian Petroleum Development Company Limited (NPDC) and ND Western Limited for the Utorogu gas fields in April 2014.

The agreement provides for the construction of facilities such as a Captive Jetty, 24MW Captive Power, a 14,000MT LPG Storage, 3,000MT LPG Barge, Office buildings infrastructure, construction of an Amine Unit to extract the Carbon Dioxide from gas, and a robust training programme for Nigerians.

According to a statement by the company, the facilities will be operational at the Utorogu Gas Field by the second quarter of 2018, and will have an annual production of 200,000MT of LPG. It will be initially operated by CMEC, while Nigerians would be trained to ensure technology transfer and capacity development. The project will be funded by long-term export finance provided by the Industrial and Commercial Bank of China (ICBC), bankers of CMEC.

The Southfield Utorogu project has great national benefits which include the local production of 200,000MT of LPG (cooking gas) to meet local LPG production demand for Nigeria; reduced flaring, which impacts the host communities; increased gas supply to the power generating stations through lean gas supply and making additional gas available from new wells.

Other benefits include creation of over 500 direct jobs and 2,000 indirect jobs for Nigerians and the reduction in vandalisation of the pipelines as the pipes now will no longer have liquids, which have mostly been the basis for vandals to break the pipelines.

Listed on the Hong Kong Stock Exchange, CMEC as a wholly owned subsidiary of China National Machinery Industry Corporation (Sinomach Group of companies), which is owned by the Chinese Government, has executed several contracts in Africa including the construction of the Phase 1and 2 of the Olorunsogo Power Plant in Ondo State.