Global Gas' LPG Plant in Nigeria Produces First Commercial Gas

Global Gas and Refining Limited

Global Gas and Refining Limited, a Nigerian subsidiary of Houston-managed Global Energy Inc., announced that commercial production has commenced at its Cawthorne Channel gas processing plant in Nigeria's Bonny River area. The barge-mounted facility is the first indigenous-owned and operated LPG (liquefied petroleum gas) processing plant in Africa, and is capable of processing 120 million cubic feet of gas per day.

Under a Gas Processing Agreement (GPA) with Global Gas and Refining, Shell Petroleum and Development Company of Nigeria Limited is supplying Global's Cawthorne Channel plant with 80 million cubic feet per day of associated gas from its Cawthorne Channel and Awoba fields. Global will extract the liquid from the gas, and the residual gas will be returned to Shell for delivery to Nigeria LNG at Bonny. The plant's processed gas will be transported through Global's 23-kilometer pipeline to storage aboard a 75,000-cubic-meter capacity FPSO, the Berge Okoloba Toru, leased by Global from Bergesen, which is moored in the Bonny River. Vitol S.A. is lifting the gas for export to the United States. The gas will be fracionated at Mont Belvieu, Texas until Global's fracionator is completed in December. Hanover Compressor Company built the barge-mounted LPG plant, and is constructing the fracionator for the topside of the Berge Okoloba Toru. Sofitel Capital is providing the acquisition financing for Global's purchase of the plant facility from Hanover Compressor Company.

"This project took nearly a decade to develop," says Global Energy Chairman and CEO Kenneth Yellowe. "Now that we have commercial production, we can celebrate with our industry partners: Shell, Bergesen, Hanover Compressor Company and Vitol. This LPG plant became a reality because of our joint effort."

For its top ranking in world gas reserves, Nigeria has few gas processing facilities, and the Nigerian government has mandated a moratorium on gas flaring. So far, there are only four facilities producing LPGs in Nigeria: in 1997, ChevTex began export of its first LPG cargo from Escravos; in 1999, ExxonMobil commissioned Oso, an offshore condensate-producing hub; and two years ago Nigeria LNG commenced production of LPG at its facility in Bonny. Production of all liquids, including LPG, from Global's Cawthorne Channel plant could peak at between 300,000-400,000 metric tonnes per year. Once Global begins fractionating at its Bonny River facility in the first quarter of 2006, Global's Cawthorne Channel LPG could supply more than twice Nigeria's demand for bottled cooking gas.

"Our LPG plant has benefits to Nigeria's environment, Nigeria's economy and Nigeria's people," says Yellowe. "We all want a solution to gas flaring, and this project is contributing to the solution in Shell's Cawthorne Field. We all know that gas demand is growing globally, and our plant has the capacity to process 120 million cubic feet of gas per day. We are bringing jobs and economic development to the Cawthorne Channel area, and more directly, at least 500 jobs to people locally. We feel pleased to be providing long-term, steady growth and income for the people of Nigeria."