Kwale CDM Project Monitoring Report

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FIRST MONITORING REPORT

ON

Recovery of Associated Gas that would otherwise be flared at

Kwale Oil-Gas Processing Plant, Nigeria.

CDM Registration NO.: 0553

Monitoring Period: 09/11/2006 08/05/2007
Document ID: CDM0553- MR01
Date: 24 September 2007

(Version-01)

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1. Executive Summary
The purpose of this monitoring report, is to calculate the Greenhouse Gas Emission reduction achieved
by the CDM Project - Recovery of associated gas that would otherwise be flared at Kwale oil-gas
processing plant, Nigeria.
The relevant details of the project activity are given below:
No.
1.
2.
3.
4.
5.

Activity
Starting of crediting period
Commissioning of project
First monitoring period
Second monitoring period
Third monitoring period

Dates
09 November 2006
01 April 2005
09 November 2006 to 08 May 2007
09 May 2007 to 08 November 2007
09 November 2007 to 08 May 2008

Total Emission Reductions

The total emission reduction units being claimed in this monitoring period is 791,325tCO2e (see
attachment for detailed calculation).

2. Reference
Sectoral Scope: Sectoral Scope 10: Fugitive Emissions From Fuels (Solids, Oil and Gas).
Approved Baseline Methodology: AM0009 ver. 2 Recovery and utilisation of gas from oil
wells that would otherwise be flared.

Approved Monitoring Methodology: AM0009 ver. 2 Recovery and utilisation of gas from oil
wells that would otherwise be flared.

Project Design Document: Recovery of associated gas that would otherwise be flared at Kwale oilgas processing plant, Nigeria. Version 02 dated 23 December 2005. Effective July 1, 2004

3. Definitions in the Report

CDM: Clean Development Mechanism
PDD: Project design Document
GHG: Greenhouse Gases
IPCC: Intergovernmental Panel on Climate Change
HP: High pressure/Horse Power
MP: Medium pressure
AP: Atmospheric pressure
IPP: Independent Power Plant
OGPP: Oil and Gas Processing Plant
AG: Associated Gas

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4. General Description of Project

4.1

Project Activity

Nigerian Agip Oil Company Ltd. (NAOC), a Company of Eni Exploration and Production Division
(formerly Agip), was incorporated in Nigeria in 1962 and engages in the exploration, development and
production of oil and natural gas. NAOC is the operator of the NNPC/NAOC/POCL Joint Venture
Agreement and was granted an Oil Prospecting Licence for Oil Processing Lease (OPL 34) in the same
year it was incorporated.
The main objective of the CDM project is the Recovery of associated gas that would otherwise be
flared at Kwale Oil-Gas Processing Plant (OGPP) (the Project). It involves the capture and utilisation
of the majority of associated gas previously sent to flaring at the Kwale plant (Kwale OGPP). The
Kwale OGPP receives oil with associated gas from oil fields operated by Eni Nigeria Agip Oil
Company (NAOC) in the Oil Mining Lease area 60 (OML60), Delta State, Nigeria. Traditionally, a
large portion of associated gas produced from the five oil fields in OML60 (Ahaka, Beniku, Okpai,
Kwale, Irri-Isoko) has been flared upon separation from the oil at Kwale, in the absence of any
economically viable, commercial or other outlet for this gas. Flaring of this gas results in emissions of
carbon dioxide (CO2) and uncombusted methane (CH4). The majority of this flaring historically takes
place at Kwale OGPP, although some flaring and venting occurs at the oil fields for emergency
purposes. In the project scenario, the captured gas will be marketed for use by end-consumers of gas.
In the absence of any local market outlet for the gas, NAOC the project proponent and its Joint
Venture partners have created a market for the gas through the construction of an Independent gas-fired
Power Plant at Okpai (Okpai IPP), consisting of a high efficiency combined cycle gas turbine
electricity generating plant. The main goal of the power plant is therefore to absorb part of the
associated gas produced at Kwale OGPP.
The project participants are:
Nigerian Agip Oil Company (NAOC) Limited (Italian) and Authorised Project Participant
Nigerian National Petroleum Corporation (NNPC);
Phillips Oil Company Nigeria Limited (POCNL) (American).
The three companies are parties to a Joint Venture (JV)
A Joint Venture (JV) partnership exists between NNPC, NAOC (operator of the JV and subsidiary of
Eni in Nigeria) and POCNL proposed the project.
The equity shares of these Companies in the Joint Venture are:
Nigeria National Petroleum Corporation

60% (NNPC);
Nigerian Agip Oil Company Ltd

20% (NAOC);
Phillips Oil Company Nigeria Ltd

20% (PONL).
The foreign proponents (NAOC and PONL) are public limited companies whose core business is the
production and trading of oil and gas; these companies have been operating in Nigeria for more than 40
years.

4.2

Technical Description of the Project

Location of the Project Activity

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The NAOC oil wells from which the associated gas is collected are located in Oil Mining Lease area
60, in Delta State, Nigeria. The gas gathering system at the oil fields is connected to the gas
processing facility by multiple pipelines feeding into five oil headers at Kwale OGPP.
The Kwale OGPP is located at Kwale village, Nigeria. Treated gas from the Kwale OGPP is
exported to the IPP located at Okpai village via a pipeline. The gas supply pipeline route from Kwale
OGPP to the IPP site is approximately 14 km and is parallel to the existing lines and Kwale-Beniku
road location. Technical details of the pipeline are outlined below (Section A4.3).
The IPP site is located on Latitude 0504124N and Longitude 0603448E, in the north eastern part of
Ndokwa East LGA in Delta State, about 14 km away from the Kwale OGPP (Fig. 2). The IPP
facility requires an approximate area of 500 m x 500 m and is close to the Niger River. The location
is in a lowland area characterized by rain forest vegetation with seasonal swamp (Figure 2).
Technical description of the project activity
The project involves the utilisation of a large fraction of the associated gas produced at the Kwale
OGPP in a combined cycle gas turbine (CCGT) power plant for electricity generation. The Kwale
OGPP is the central collection point for oil produced from wells in the OML60 area. The Kwale
facility was commissioned in 1975, and was principally designed for the separation of associated gas
from the oil for the purpose of exporting crude oil, which is pumped to an export terminal in the
south. The plant was expanded in 1987 to include a gas processing facility to allow export of dry gas
for re-injection at wells in OML60.
The re-injected gas is stored at reservoirs within OML60 for future potential use; this gas is not used
to enhance oil recovery or for gas lift. A small 90 bar gas export line was commissioned in 2004 to
deliver some associated gas to the gas processing facility at Ob/Ob. This export line takes only a
fraction of the associated gas produced at Kwale OGPP, and was solely designed to serve as a buffer
for gas delivery at Ob/Ob for the N-LNG facility. A further fraction of the gas is used for onsite
power use in the separation process and other auxiliary equipment (oil heaters, glycol dehydration
and glycol regeneration, pumping, compression etc), and some is exported back to the oil fields for
re-injection for gas storage. The remaining associated gas produced is flared, as it is not
commercially viable to add an additional LNG train solely on the back of associated gas (see Section
B.3 below). Implementation of the project involves the capture of a large proportion of this balance
of gas, and its export via pipeline at 30-bar pressure - to the Okpai IPP.
Technology employed by the project activity
The project involves the use of the following technologies:

Gas dehydration, taking up ullage at the existing Kwale OGPP;

Gas compression and a 14 km pipeline inter-connector from the Kwale OGPP to the IPP at
Okpai;
480 MW combined cycle gas turbine power plant;
330kV overhead electrical line to connect the Okpai IPP to the existing regional grid substation at Onitsha.

The latter two are, for the purpose of applying AM0009, considered to be outside the project
boundary of the project activity.
See the schematic in the next page.

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Associated gas
Oil

Venting

Associated gas in the project

OML 60 oil
wells
Flaring

Recovered
oil

Gas reinjection and

storage

Kwale OGPP
Oil/gas
separation

On-site
consumption

On-site
consumption

0 LPG

CH4

CO2

CO2

CO2

Condensate

Gas dehydration/compression

High pressure
AG

Medium
pressure AG

Gas at 90 bar

Okpai IPP

Low pressure
AG

Gas at 30 bar
Transportation

Flaring
LPG

CO2

Ob/Ob GPP
Condensates

Oil
production

Dry gas

N-LNG

Other gas
wells

Each technical element of the project activity is described in greater detail below.
i.

Kwale OGPP - It includes the following equipment:

a) 5 crude oil headers: 2 x medium pressure, 2 x low pressure; 1 x high pressure from
the pipelines from wells in the OML 60 area
b) 8 oil/gas separators: 2 x medium pressure; 2 x low pressure; 1 x high pressure; 1 x
atmospheric pressure separator on the oil export line, 2 x separators in the gas
conditioning plant.
c) Glycol dehydrator: Includes contactor tank, flash tank, pumps, regenerator, heat
exchange, air cooler etc.
d) Oil stabilization units: Includes pumps, heat exchanger, air cooler etc.
e) Fuel gas treatment: Includes high-pressure separator, low-pressure separator, pumps,
and heater unit.
f) 6 Onsite power generation 4 x 725Kw, 1x 480Kw and 1 x 688Kw: 5 main duty
generators, 1 standby/emergency unit (688 kW)
g) Storage tanks for oil and gas.
h) 8 compressors 2 x 650HP (LP), 3x 650HP (MP) and 3 x 3210HP (HP)
i) Firefighting equipment
j) Waste water treatment: Includes flotation plant, electrolyte precipitator, emulsion
breaker, antifoam solution + pumping equipment.
k) 4 flare points: 1 x HP; 1 x MP; 1 x HP, 1 x AP on the oil export line + knockout
drum, flash vessel, scrubber and condensate removal and recovery.\
l) Oil burning pit for safety system.

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m) Ancillary equipment such as: Pumps, boosters, coolers,
heaters, scrubbers, dryers, condensate recovery system, storage, cranes, N2 purge
system, pipeline headers, pig launchers and receivers etc.

5. Monitoring Methodology and Plan

The calculation of emission reduction applies methodology AM0009 ver. 02 - Recovery and
utilisation of gas from oil wells that would otherwise be flared.
This methodology is considered relevant to the project based on the conditions that AG is recovered
in Kwale OGPP and is further processed and transferred by pipeline for electricity generation as per
the Nigerian Governments programme for sustainable power generation. The substitution of fuels
due to the project activity is also unlikely to lead to an increase of fuel consumption in the respective
market. Project activity has prevented the flaring of the generated AG. Furthermore, data on the
products of the gas processing plant and the gas recovered from other oil exploration facilities in
cases where these facilities supply recovered gas to the same processing plant is readily available.
The methodology is applied to the context of the project activity because:

5.1.

The methodology involves the application of ex post monitoring of various carbon flows
across the gas recovery, processing, export, and emergency relief (flares) systems, plus any
accidental release through plant or pipeline failure.
The monitoring data is used to compile the baseline calculation, which assumes that, in the
absence of the project, the carbon volumes would be directly emitted to the atmosphere
through the continued flaring of the gas produced in association with oil.

Monitoring Data and Calculation

See Attachments.

6. Quality Control (QC) and Quality Assurance (QA)

6.1.

QC and QA Procedures

In NAOC, a Health Safety, Environment, Quality and Radiation Protection (HSE) Integrated
Management System (IMS), has been developed, in line with international standards (e.g. ISO 9000
on Quality Management System). Specifically to do with QC and QA is the procedures and
specifications on:

IPP CDM project Monitoring and Reporting (DHSE-ENV-P04)

NAOC GHG Emissions (DHSE-ENV-R02)
HSE Reporting (DHSE-INT-P15)
HSE IMS Internal Audit (DHSE-ENV-P04)
Management of Non Conformances, Corrective and Preventive Actions (DHSE-ENV-P06)
HSE Procurement Requirements (DHSE-INT-P1rev00)
HSE Design Requirements (DHSE-INT-P12rev00)
Project HSE Management (DHSE-INT-P02rev00)
HSE Management Specification for EPC/EPIC Contracts (DHSE-INT-S02rev00)
HSE Management Specification for Strategic Goods Supply Contracts (DHSE-INTS03rev00)
HSE Management Specification for Strategic Service Contracts (DHSE-INT-S04rev00)

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The Procedures and specifications above are established and implemented to ensure effective
meeting of HSE targets and plans, of which CDM is one.
Competent and well-trained NAOC staff and contractors operate the Kwale OGPP. The
organisational structure also reflects the ability of effective management of the operating systems
and procedure to ensure a successful operation of the project and credibility and verifiability of the
emission reductions achieved.

7. Emissions Reductions
Total emissions reductions generated by the project are 791,325 tCO2e