THE strategic alliance between Pan Ocean and Skye Bank Plc may soon promote the emergence of a new 200 million standard cubic feet per day (mmscf/d) gas processing facility in Oil Mining Lease (OML 98) in the Ovade-Ogharefe area of the Niger Delta region.

The Ovade-Ogharefe Gas Processing Plant was designed as a carbon emission reduction project with the capacity of delivering 200mmscf/d of dry gas to the domestic gas market for power generation and industrial development.

Described as the emerging largest in West Africa, the facility is expected earn carbon credits for its operations under the Clean Development Mechanism (CDM) of the Kyoto Protocol where its operations were reported and established.

Pan Ocean confirmed that it had initiated a CDM certification for its gas utilisation project as part of its contribution to improving Nigeria’s image as a Green oriented country in line with the United Nation’s Kyoto protocol.

With the CDM, reductions in greenhouse gas emission from projects in developing countries are registered and monitored under the United Nations Frame work Convention on Climate change (UNFCC) and sold to developed countries that have limits for their emissions.

Pan Ocean is the operator of the OML 98 with 40 per cent equity, while the Joint Venture partner, the Nigerian National Petroleum Corporation (NNPC) holds 60 per cent. Skye Bank provided funding for Pan Ocean’s equity under the Joint Venture agreement.

The Executive Director, Corporate and Investment Banking, Skye Bank Plc, Timothy Oguntayo confirmed that the funding to Pan Ocean Oil was another demonstration of the active supports of the bank towards actualising the Federal Government’s local capacity and content in the oil and gas sector.

He noted that the gas plant would not only benefit all stakeholders but also improve Nigeria’s environment rating.

According to him, the plant will, among other things, ensure zero routine flaring in all areas of its operation due to the adopted modularised plant concept, which makes the plant expandable for additional gas finds in her concession areas.

He added that Skye Bank’s partnership with Pan Ocean Oil Corporation (Nigeria) Limited has been credited with the company’s success in processing gas, which could have been flared from its gas processing plant.

Rather than flare the gas emanating from its operation, Pan Ocean Oil processes its gas in compliance with the carbon credit scheme of the United Nations Framework Convention on Climate Change (UNFCC) for which the company was qualified in February 2009.

Experts have identified hindrances to the development of the oil and gas industry in Nigeria to include high capital requirement, dearth of critical trading infrastructure, low manpower and poor defining rules.

Oguntayo reiterated that despite the challenges associated with oil and gas finances, Skye Bank would continue to support committed Nigerian investors, who have defied the odds by making substantial investments in the sector in order to raise the Nigerian flag high.