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Shell Receives Design To End Nigeria Gas Flaring -Official

THE WALL STREET JOURNAL

OCTOBER 5, 2009, 10.46 A.M. ET

IBADAN, Nigeria (Dow Jones)–Shell Petroleum Development Co., a subsidiary of Royal Dutch Shell PLC (RDSB), said Monday that it has taken delivery of a 900 million naira ($6.12 million) detailed engineering design for a project that will put out gas flares in three fields in Nigeria’s western Niger Delta.

Tony Okonedo, SPDC’s corporate media relations manager, said in a statement that Nigerian Technical Co., or NETCO, the engineering arm of the Nigerian National Petroleum Corp., won the contract in December 2007 to design the Associated Gas Solution project for Otumara, which covers the Otumara, Saghara and Opuama fields.

The project involves the collection of gas from the three fields to a central processing facility at Otumara, which will treat and send it for domestic use through the Escravos-Lagos pipeline system.

He said NETCO executed the design with the support of its technical consultants at a cost of over NGN900 million.

Nigeria has issued several deadlines to end gas flaring in its oil-rich Niger Delta region with the threat of sanctions for noncompliance for all oil companies operating in the region.

Nigeria is the world’s seventh-largest gas producer with about 184 trillion standard cubic feet of proven reserves, but flares about 2.2 billion scf a day.

Okonedo said the completion of the detailed design paves the way for construction, procurement and installation of facilities, adding that the Oturama project is ???part of SPDC’s efforts to harness Nigeria’s huge gas resources for profitable use, and end flaring of gas in its operations.???

He said that since 2000 SPDC has invested some $3 billion in gas gathering projects; an additional $3 billion is needed to complete them.

Okonedo said funding and security challenges have delayed implementation of the projects.

-By Obafemi Oredein, Dow Jones Newswires; 234 2 7510489

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