[size=14pt]Exxonmobil Pioneers Use of Made-in-Nigeria Pipes[/size]
Posted on: Tue, 21 Sep 2010 08:08:06 EDT

Abuja, Sep 21, 2010 (Leadership/All Africa Global Media via COMTEX) --
American energy giant, ExxonMobil has pioneered the use of made-in-Nigeria pipes in the oil and gas industry as the company is set to deploy Helical Submerged Arc Welded (HSAW) pipes fabricated locally by SCC Pipe Mills for its Usari-Idoho pipeline replacement project in Akwa Ibom State.

The project is in the shallow water oil fields of ExxonMobil and the pipes will be used to replace the 24 inch oil pipeline connecting the Usari and Idoho platforms, which have a water depth of 21 meters.

This will be the first time made-in-Nigeria pipes are used for an oil and gas project in the country by any international or local operating company and is expected to unlock investments in pipe mills and other oil industry support facilities.

The Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr. Ernest Nwapa, disclosed this recently in Yenagoa, Bayelsa State, at a meeting with representatives of China's major welded line pipe maker, Jiangsu Yulong Steel Pipe, led by its Director of Sales, Mr. M. A. Abbas.

According to him, "A number of investors had firmed up plans to establish pipe mills and related facilities in Calabar, Koko, Gbaran Ubie, but were delaying their final investment decisions over concerns that SCC, which had invested in a pipe mill in the country, was not being patronised by the industry.

He described the use of SCC pipes by Exxon Mobil as a breakthrough in the implementation of the Nigerian Content Act and a strong signal that government will ensure that any investment in oil and gas industry support facilities will be protected and patronised.

Nwapa further advised serious investors to accelerate their projects so as to take advantage of the Nigerian Gas Master Plan, infrastructure project and the Calabar-AKK pipeline project which the Nigerian National Petroleum Corporation is promoting on behalf of the federal government.

[size=14pt]The Minister of Petroleum Resources, Mrs. Deziani Alison-Madueke, had stated two weeks ago during the inauguration of the Governing Council of NCDMB by President Goodluck Jonathan, that the steadfast implementation of the Nigerian Content Act will, in the next four years, lead to the establishment of three to four new pipe mills and other ancillary manufacturing plants to service the demands of the industry.

She also stated that the federal government's vision was to retain over $10 billion out of an average annual oil and gas industry expenditure of $20 billion in the Nigerian economy compared to the current sum of less than $4 billion. [/size]

The Usari-Idoho pipeline replacement project is being executed by Saipem Nigeria for ExxonMobil and extensive tests were carried out on the pipes both locally and overseas, which confirmed that they met all required technical specifications.

The executive secretary stressed that with the confirmation that the pipes fabricated by SCC met all international standards, there was no reason why other operating companies in Nigeria will not source their pipes from the company and other proposed pipe mills across the country.

Nwapa also noted that NCDMB had insisted that any of the proposed Nigerian pipe mills that could meet the project schedule of the Calabar-AKK pipeline project or any project in the oil and gas industry would be fully utilised before any quantity can be imported.

Although, the SCC pipe mill has a capacity of producing 30,000 tonnes at a time and an annual capacity of 100,000 tons, the only order placed in the factory since it was upgraded three years ago was the 6,000 tons placed by Exxon Mobil in 2007.

Nwapa, however, revealed that Shell and Agip were processing orders for supply of line pipes from the SCC mill and charged other operators to toe the same line in order to encourage keen investors to progress their pipe mill construction.

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She also stated that the federal government's vision was to retain over $10 billion out of an average annual oil and gas industry expenditure of $20 billion in the Nigerian economy compared to the current sum of less than $4 billion.

Doing the math, that is a full $6billion worth of local business to be created! There is a lot of new direction and vision in the petroleum sector, some of which will no doubt, spill off into other areas and accelerate our development.