Shell Begins Crude Exports from New Otakikpo Terminal in Nigeria

Shell Nigeria Exploration and Production Company Limited has commenced crude oil exports from the newly established Otakikpo onshore terminal, signaling the operational launch of a $400 million infrastructure project developed by Green Energy International, a marginal field operator.

Situated within the OML 11 license area, southeast of Port Harcourt, the terminal is capable of exporting up to 360,000 barrels of crude per day. The crude is transported via a 23-kilometer, 20-inch pipeline to a single point mooring offshore, where its 21-meter depth accommodates Aframax and Suezmax-class vessels.

Green Energy stated that the facility replaces an expensive evacuation system that previously relied on barges, which cost an estimated $120,000 per day. The company believes this development will significantly lower crude production costs, potentially reducing them by as much as 40 percent.

“The government should see this terminal as a strategic alternative to investing in multiple floating storage units. Storing crude in onshore tanks lowers the cost per barrel and reduces operational expenses,” said Kayode Adegbulugbe, Managing Director of the Otakikpo Terminal.

Before the terminal’s commissioning, Green Energy exported its Otakikpo-grade crude using the Ima floating storage unit operated by Amni International. The new facility now opens up the potential to process and export crude from over 40 nearby marginal fields, with a combined output potential of 200,000 barrels per day and estimated reserves of 3 billion barrels of oil equivalent.

The terminal is also designed to accommodate third-party producers, with the capacity to receive up to 250,000 barrels daily. It includes a 6-kilometer, 6-inch offshore pipeline to facilitate external inflows.

In anticipation of increased demand, Green Energy has plans to develop a broader gathering system and expand its storage capacity from the current 750,000 barrels to as much as 3 million barrels. The company told industry stakeholders that it can install additional tank capacity within nine months if needed, although current utilization remains under 12 percent.

Initial crude injection into the facility began on March 30. The first export cargo was loaded by Shell onto the Aframax tanker Lipari.

Although Green Energy’s average production stood at 5,000 barrels per day in April, it has obtained regulatory clearance to scale up output to 30,000 barrels per day under a revised development plan approved by the Nigerian Upstream Petroleum Regulatory Commission.