press release

Chevron Press Release - NNPC and Chevron Sign Agreementson Escravos Gas Project

This is news concerning Chevron but issued by a Chevron subsidiary, Chevron Nigeria Ltd., and archived here for record purpose.

ABUJA, Aug. 22, 2001 -- The Nigerian National Petroleum Corp. (NNPC) and Chevron Nigeria Ltd. (CNL) have signed Venture Agreements for the execution of the Escravos Gas Project Phase 3 (EGP-3) and the Escravos Gas-to-Liquids (EGTL) project. These Agreements will formally initiate the Front-End Engineering Design (FEED) phase of the EGTL and EGP-3 projects. NNPC's equity participation in EGP3 is 60 percent and in EGTL is 25 percent.

The EGP3 and EGTL projects are major initiatives by the NNPC/Chevron joint venture to put out the flares and monetize the gas being produced along with oil in its operations. They will improve the environment through the reduction of greenhouse gases and generate revenue for Nigeria and Chevron through product export, while creating jobs.

EGP 1 and 2, which came on stream in 1997 and 2000 respectively, currently process nearly 200 million cubic feet a day of gas that would otherwise be flared. EGP3, under which a plant will be built adjacent to the existing onshore gas plant in Escravos, will increase the quantity of processed gas by 400 million cubic feet per day.

A gas-to-liquids plant will also be located in Escravos under the EGTL project. EGTL will combine advanced hydroprocessing technology, developed by Chevron, and state-of-the-art Slurry Phase Distillate (SPD) technology, developed by Sasol of South Africa to produce about 34,000 barrels per day of premium Synthetic Fuel and naphtha for export. These products are environmentally friendly, as they are virtually free of sulfur and aromatics

The venture agreements would put the projects, jointly valued at $2 billion dollars, on track towards completion by late 2005. The Group Managing Director of the NNPC, Mr. Jackson Gaius-Obaseki, signed on behalf of the Corporation, while Mr. Ray Wilcox, managing director, Chevron Nigeria Ltd. signed for his company.

"The agreement that we signed is a significant milestone. Today, we can say that the projects have truly begun, and we can begin a count down to their completion, which will almost totally eliminate routine gas flaring in oil fields operated by the NNPC/Chevron joint venture," said Mr. Gaius-Obaseki.

In his own remarks, Mr. Wilcox described EGP3 and EGTL as "a direct result of our continuing efforts at meeting the challenge for gas utilization initiatives, and our commitment to putting out the flares in our operations by 2008." He added that apart from the environmental benefits, the projects also represent a major investment in Nigeria's economy that will generate additional revenue for the country and provide many jobs during the construction and operational phases.

The signing of these agreements follows the formal launch of the EGP3/EGTL initiative by their Excellencies Presidents Olusegun Obasanjo and Thabo Mbeki of South Africa in New York, Sept. 8, 2000, and here in Nigeria by the NNPC/Chevron Joint Venture on Oct. 18, 2000.


This is news concerning Chevron but issued by our 50/50 joint venture partner, Sasol Chevron, and archived here for record purpose.

SASOL CHEVRON PASSES MAJOR MILESTONE ON NIGERIAN ESCRAVOS GAS-TO-LIQUIDS PROJECT

LONDON, 22 August 2001 -- Following the execution of the necessary Venture Agreements between the Nigerian National Petroleum Corporation (NNPC) and Chevron Nigeria Limited (CNL) on August 14, 2001, an enabling framework has been established, which allows Sasol Chevron and the NNPC/CNL Joint Venture to initiate the Front-End Engineering Design (FEED) phase of the Escravos Gas-to-Liquids (EGTL) project. For Sasol Chevron, this is a major step towards leading the development of next generation, premium, environmentally-friendly alternative fuels.

EGTL is a major natural gas initiative by project asset owners NNPC (25 percent) and CNL (75 percent). It provides significant environmental benefits by eliminating the flaring of natural gas, and by capturing the gas produced along with oil in its operations and producing ultra clean GTL Fuel.

Established to take advantage of its parent companies' world leading Gas-to-Liquids capabilities, Sasol Chevron will provide EGTL with licensed technology, operations management, technical services and will also market the GTL Fuel (synthetic fuel suitable for diesel engines) and naphtha products. Sasol is also providing risk-based financing (based on project performance) to Chevron for the EGTL venture, which represents approximately 50 per cent of the project cost.

"EGTL is the first of three or four proposed GTL ventures in which Sasol Chevron will take a leading role and will establish the company at the forefront of Gas-to-Liquids development around the world," said George Couvaras, Chief Executive Officer Sasol Chevron.

"With each venture the initial footprint plant will provide the basis of subsequent expansion phases. For EGTL, production will begin at 34,000 bpd with the first phase, but can be expanded to 120,000 bpd within 10 years."

The EGTL plant will utilise the Sasol Slurry Phase Distillate process which optimally integrates three state-of-the-art GTL technologies from Haldor Topse, Sasol and Chevron to produce GTL Fuel and chemical naphtha for export. GTL Fuel contains virtually no sulphur and no aromatics, resulting in substantially lower hydrocarbon, carbon monoxide, nitrogen oxide and particulate emissions than conventional fuels. It also has a significant performance advantage, with cetane values (diesel equivalent of octane in petrol) that are much higher than conventional diesel.

Notes To Editors

Sasol Chevron was established in October 2000 as a 50/50 joint venture to actively pursue commercial application of GTL technology for selected Chevron and Sasol held reserves of natural gas; third-party gas reserves; and host countries seeking to monetize their gas reserves.

Sasol Chevron's mission is to foster the development of a GTL industry and global markets for GTL Fuel, by designing, building and operating plants throughout the world to manufacture and market premium environmentally friendly alternative fuels and products. Sasol Chevron intends to implement 3 or 4 ventures worldwide, anticipating investments in excess of (U.S.) $5 billion over the next five to ten year period.

The Slurry Phase Distillate (SPD) process is a commercially proven proprietary Sasol technology for converting natural gas into liquid hydrocarbon products in three steps:

  • Utilising competitive reforming technology developed by, and licensed from, Haldor Topse of Denmark, the main component of natural gas, methane, is reacted with oxygen over a catalyst to form syngas, a mixture of carbon monoxide and hydrogen.
  • Using the Fischer-Tropsch conversion process in the Sasol Slurry Phase reactor, syngas is reacted over Sasol's proprietary cobcatalyst to form liquid hydrocarbons -- condensates and waxy syncrude.
  • Chevron's proprietary ISOCRACKING process is used to upgrade waxy syncrude by separating heavier molecules, which are usually solid at room temperature, and rearranging them so they become liquid. This process yields a lighter, premium-grade fuel such as synthetic fuels and naphtha, that contain virtually no sulphur or aromatics.

Updated: August 2001