Conceptualizing the Otakikpo Onshore Terminal: The First Indigenous Onshore Terminal

Abstract

The Otakikpo field development activities commenced in 2015 with the re-entry and completion operations on Otakipo-02 & 03 wells and the installation of a 10kbpd processing facility. Due to its proximity to the shoreline, an amphibious production and evacuation methodology was implemented. This consists of batch production into onshore tanks, a subsequent evacuation into offshore shuttle tanker via an installed 6" Km offshore pipeline and final transportation to a 3rd party FSO facility. The first phase of the field development was completed in 2017 and production declined from ~ 6500 bopd to ~ 4000 bopd by 2022. Green Energy successfully executed phase 2 of the field development by drilling and completing two new development wells, Otakikpo-04 and -05 wells in 2022 and field production increased to circa 10000 bopd. The production facilities limit the field production to 12,000 bopd while the evacuation infrastructure could only effectively handle about 14,000 bopd. Moreover, the field's evacuation cost is very exorbitant mostly from the cost of hiring marine vessels (2 gunboats, 2 shuttle and 2 tugboats) and paying for CHA charges at 3rd party terminal. At lower production rates, the cost per barrel will be unsustainable. It is for this reason that the Operator conceptualized a phase 3 development strategy to develop and install an efficient evacuation/export strategy and thus reducing overall OPEX $/bbl. It also plans to make the Otakikpo field a crude processing and export hub in the Eastern Niger Delta area. To achieve this, the operator plans to construct an onshore terminal and export infrastructure very close to the field. This consists of a scalable onshore terminal with an initial 750,000 barrels of oil storage capacity located within the field with a 360,000-bpd pumping and metering capacity for loading tankers. It also includes a 20" × 23km offshore export pipeline connecting the terminal to an unmanned single point mooring (SPM) crude offloading system. The terminal is expandable to store circa 2 million barrels of crude with a daily processing capability of 250,000bopd. The proposed Otakikpo onshore terminal is conceptualized as a national infrastructure with potential to unlock significant stranded national reserves. It will be the first new onshore terminal in Nigeria in over 50 years, and first to be non-IOC owned and operated. Moreover, the terminal is expected to create significant value for the over 20 stranded marginal fields that are in proximity to terminal which would benefit from access to readily- accessible, cost effective and fit for purpose evacuation infrastructure. This paper aims to highlight the justifications for the Otakikpo onshore terminal, lessons learnt during the conceptualization and design stages, status of the project, opportunities for future expansion and its potential role in the energy security of the nation in future.