1. Paolo LINZI Safety, Environment and Quality VP Eni E&P Division
Recovery of Associated Gas for independent power generation The Kwale – Okpai Project Nigeria
Paolo LINZI
Safety, Environment and Quality VP
Eni E&P Division

2. Background: Flaring down in Nigeria The Kwale - Okpai Project overview
Agenda
Background: Flaring down in Nigeria
The Kwale - Okpai Project overview

3. Eni‘s Action Plan on Kyoto Protocol
Eni Action Plan for Flaring / Venting reduction
R&D activities: CCS Project and GTL pilot project
Development of a sustainable energy model and definition of the transition path
Eni has approved a corporate Action Plan on Kyoto Protocol. The paln aims at:
Accounting and certificate Eni’s ghg emissions
Being compliant whith Emissions Trading
Identifying CDM and JI opportunities
Developing a Corporate Carbon Managemet Strategy
Working groups on specific issues have been ideitified.
Moreover a R&D programme on Carbon Sequestration has been implemented as wall as actions related to improvement of efficiency
CDM an JI projects identification and a flaring down programme.

4. Flaring Down in Nigeria
View of Nigerian flares as seen from the satellite
An unusual brightness in the dark of the African continent
Nigeria produces 2.3 M Bopd of oil and 6 BScf/day of associated gas.
About 45% of produced gas is presently flared.
Gas reserves in the country are estimated to be 180 Tcf
The government through fiscal incentives has opened new markets
The exportation of liquefied natural gas (N-LNG) started in 1999
Flaring is a main issue in Nigeria.
Currently huge amounts of gas are flared (about 45%) though the government has introduced fiscal incentives for reducing this practive.

5. History of Eni in Nigeria (1)
Establishment of “Nigerian Agip Oil Company” NAOC starts exploration activities
First jv with Nigerian government (60% NNPC)
Electric power supply to Brass community
1980 Establishment of AENR ltd
Gas re-injection in Obiafu-Obrikon plant
NAOC acquires 5% of the Shell assets (increase of about 60,000 bopd equity)
1989 Establishment of Nigeria LNG ltd (Agip 10.4%)

6. History of Eni in Nigeria (1)
1994 First NGL supply to Eleme petrochemical
1996 Establishment of NAE Ltd
1997 Renewal of NOAC jv OMLs until year 2027
1999 NAOC provides first gas for N-LNG plant
2000 NAOC defines a plan to reach “zero flaring”
2001 NAOC signs the first electric power sale agreement for the IPP at Okpai
2003 Start up of Abo field (first off-shore deep water in Nigeria)
2003 Establishment of “Brass LNG Ltd” (Eni 17 %)
2005 Start-up of Okpai IPP (first IPP in Nigeria)

7. Relationship With Local Communities
Social and Environmental commitment
1976: 1st social project – Power supply to Brass Community
1985: Reducing gas flaring through gas re-injection
1987: Green River social project
2000: Start of “zero gas flaring” project
2001: Social projects - Roll-back malaria, Burma Rice
<5%
2009
Target

8. Nigerian Zero Flaring Gas Master Plan
GAS SUPPLIES
(existing and planned)
to N-LNG:
- Trains 1 & 2
- Train 3
- Trains 4 & 5
- Train 6
to Brass LNG
to IPP:
- Okpai – Phase 1
- Okpai – Phase 2 (planned)
to Rivers State Gov. Power Plant
to Eleme Petrochemical:
- Fuel Gas
- NGL
GAS INJECTION
- Kwale field
- Ob/Ob field
INTERNAL CONSUMPTIONS
Fuel Gas
- power generation
- gas turbines drivers
Eni has approved a Nigerian Zero Flaring Master Plan.
The Plan comprises several measures, both internal end exeternal:
External measures: N-LNG trasportation improvement, Power Generation, transportation to Eleme Petrochemical Plant
Internal measures: gas reinjection, power generation fueling
Equity shares in the projects:
N-LNG Trains: NNPC (60%), NAOC (20%); Phillips Oil Company Nigeria (20%); Train 3 for about ~ 4 mln Ton CO2/year; Trains for about ~ 7 mln Ton CO2/year
Okpai IPP project: NNPC (60%), NAOC (20%); Phillips Oil Company Nigeria (20%)

9. NAOC Gas Configuration Land & Swamp Area
IPP project
IPP
NAOC Gas Configuration Land & Swamp Area
AKRI
KWALE
EBOCHA
IRRI/ISOKO
OB/ OB
SAMABRI
IDU
FORCADOS
TUOMO
OSHIE
ELEME
ROW GTS - 1 (N-LNG)
BENIBOYE
NAOC’s ROW (OB/OB-Brass) T6
P/ HARCOURT
OGBAINBIRI
SPDC’s ROW (Nun river-Kolo creek-Rumuekpe)
Rumuji
The Kwale Oil-Gas Processing Plant is operated by NAOC and it is situated in the Oil Mining Lease area 60 (OML60), delta State, Nigeria.
The Okpai Power Plant, as already said, is 14 km far from Kwale.
TIE-IN POINT
NAOC/NLNG GTS
Legend:
CLOUGH
CREEK
OBAMA
Oil Terminal
ROW GTS -4 (N-LNG)
LNG Terminal
TEBIDABA
Raw Gas
BRASS
Gas Line to Bonny
NGL
BONNY
Gas Parallel Line
Flowstation Upgrading
New pipelines

10. Background: Flaring down in Nigeria The Kwale - Okpai Project overview
Agenda
Background: Flaring down in Nigeria
The Kwale - Okpai Project overview

11. The Project Concept
PURPOSE/ACTIVITY
Utilization of previously flared associated gas produced in the Kwale Oil-Gas Processing plant
Transportation of the gas through a 14 km long pipeline
Use as fuel in plant and in ad hoc built Combined Cycle Gas Turbine Independent Power Plant
The project consists of taking medium and low pressure associated gas trains from the Kwale Oil-Gas Processing Plant
which were (in absence of any economically viable, commercial outlet) previously flared after separation from oil,
and transporting the gas along a pipeline for use in power generation at a high efficiency Combined Cycle Independent Power Plant
located at Okpai (it is a 480 MW combined cycle gas turbine)

12. On-grid energy installed capacity in Nigeria
The project concept results from the analysis of the power genertion and distribution system in Nigeria.
The generation plants and the distribution grid are mainly obsolete and often suffer of a lack of maintenance.
Hence losses can reach some 40% of the generated electricity.

13. IPP PROJECT PARTNERS TECHNOLOGY NNPC (60%); NAOC (20%); PONL (20%)
Project Description
IPP PROJECT PARTNERS
NNPC (60%); NAOC (20%); PONL (20%)
TECHNOLOGY
Gas dehydration, taking up ullage at the existing Kwale OGPP;
Gas compression
14 km pipeline inter-connector from the Kwale OGPP to the IPP at Okpai
A 480 MW combined cycle gas turbine power plant
The project involves the use of the following technologies:
gas dehydration unit, gas compression unit and a 14 km pipeline inter-connector from the Kwale OGPP to the IPP at Okpai.
The participants are the same subject forming the joint venture of the Production Sharing agreement

14. Approved Methodology AM0009 version 02
Methodology Overview
Approved Methodology AM0009 version 02
Recovery and utilization of gas from oil wells that would otherwise be flared
The Methodology ued is AM0009 version 02, the “Rang Dong” (Vietnam) project Methodology.
The Methodolody is applicable to flaring down projects under the conditions listed in the slide. Among them it is important to point out the third one: the recovered gas must substitute fuels with equal or higher carbon content. This is the case of the Kwale – Okpai project as in Nigeria the natural gas as a major share in the power generation fuel mix and, moreover, the national strategy to expand power generation outlitnes an increase of gas usage
Gas at oil wells is recovered and transported via pipelines to a process plant where dry gas, LPG and condensate are produced;
Energy required for transport and processing of the recovered gas is generated by using the recovered gas;
The products will substitute only the same types of fuels or fuels with a higher carbon content – current electricity generating mix in Nigeria is oil: 6.3%, natural gas: 56.9%; Hydro: 36.8%, and the Nigerian government’s energy strategy outlines plans to increase the use of natural gas in power generation;
The substitution of fuels due to the project activity is unlikely to lead to an increase of fuel consumption in the respective market;
In the absence of the project activity, the gas is mainly flared.

15. Baseline and Monitoring Plan
CO2 equivalent emissions from flaring of associated gas, less:
Volume of dry gas exported from Kwale plant to OB/OB gas plant
Volume of dry gas used for reinjection at OML 60
MONITORING
Ex post monitoring of various carbon flows across the gas recovery, processing, export, and emergency relief (flares) systems, plus any accidental releases through plant or pipeline failure
The Project Baseline is the scenario that reasonably represents the anthropogenic emissions by sources of GHG that would occur in the absence of the proposed project. The Baseline it is equal to the emissions deriving from flaring of the amount of gas recovered from the oil wells, reduced of the
dry gas exported from Kwale OGPP to Ob/Ob GPP and the dry gas exported for reinjection at OML 60.
Monitoring Plan:
It 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 releases through plant or pipeline failure.

16. Boundaries and Crediting Period
The project boundaries are the Kwale Oil-Gas Processing Plant and the pipeline inter-connector between Kwale OGPP and the IPP
CREDITING PERIOD
A crediting period of 10 years ( ) has been chosen
OVERALL CREDITS
14.97 Miln tones CO2eq
The Boundaries are the estimated margin around the project, within which the project’s impact (in terms of GHG emission reductions) will be assessed.
The CREDITING PERIOD defines the period over which emission reductions of the project can be claimed

17. Additionality assessment
In the Project Design Document the additionality demonstration is schematically explained with this table:
Because of legal or economic barriers, in the baseline scenario flaring would have been the only option for using such a big amount of gas like the one used to feul the IPP (Independent Power Plant)

18. Emission Reductions over the crediting period:
Project Emissions
Emissions from the Kwale gas processing plant that are attributable to the gas trains exporting to the Okpai IPP
Fugitive and accidental emissions from the transportation of gas to the Okpai IPP
Emissions related to the flaring of blow down from the IPP pipeline
The Emissions Reductions are equal to the emissions related to the recovered gas less the project emissions
In the Project Design Document three contribution to emissions are deemed to occur:
1. Emissions from the Kwale Processing Plant related to the gas transportation
2. Fugitive Emissions that can accidentally occur along the pipeline
3. Flaring of blow down from the Okpai IPP pipeline
Emissions reductions are given by the emissions corrensponding to the recovered gas less the 3 contribution due to the Project
Emission Reductions over the crediting period:
14,969,337 tonnes CO2eq

19. Project Emissions
In the Project Design Document three contribution to emissions are deemed to occur:
1. Emissions from the Kwale Processing Plant related to the gas transportation
2. Fugitive Emissions that can accidentally occur along the pipeline
3. Flaring of blow down from the Okpai IPP pipeline
Emissions reductions are given by the emissions corrensponding to the recovered gas less the 3 contribution due to the Project

20. The Clean Development Mechanism
Conclusions
The Clean Development Mechanism
A help for the Oil &Gas sector in the economic efforts to:
Cut flaring and venting emission
Deploy Efficient Technologies in developing countries
The Kwale – Okpai Project
A contribution to sustainable development. Its benefits:
A significant step to Eni "Zero Gas Flaring" Plan
Climate change mitigation
Deployment of sustainable technology in Nigeria
Boosting CDM projects development in Nigeria
New opportunities to implement flaring down projects worldwide
The CDM can offer significant opportunities to cut the costs related to flaring down programmes. At the same time it can be a tool for deploying new generation technologies in developing countries.
The Kwale Project is an example of how to use the opportunities coming from the Clean Development Mechanism for reducing flaring emissions and creating environmentaly friendly development in needy areas like African Countries