By MICHAEL EBOH

The Nigerian Content Development Monitoring Board, NCDMB, said Nigeria will earn about $300 million (N47.7 billion) annually or $1.2 billion (N190.8 billion) over the next four years, between 2013 and 2017, in the local production of steel pipes for the exploration and production of crude oil in Nigeria.

The NCDMB in its ‘Nigerian Content Implementation Framework for 2013,’ said it planned to directly facilitate the increase of local steel pipe annual production capacity from 100,000 metric tonnes, MT, in 2011 to 900,000MT by 2017.

According to the NCDMB, by 2017, local capacity of 500,000MT will exceed exploration and production demand for steel pipes leading to 100 per cent utilisation of locally produced steel pipes.

“NCDMB’s approach is structured around radically increasing local supply of steel pipes in product categories that will have the largest impact, thus starting with welded pipes.

“Through NCDMB’s intervention, $300 million of upstream oil and gas industry spend will be retained annually, with 1,200 direct jobs and 9,000 indirect and induced jobs created,” the report stated.

The NCDMB put the petroleum industry’s annual demand of line pipe at about 800,000 tonnes, saying this presents enormous opportunities for investors.

According to the report, the projected annual industry demand of line pipe is put at over 800,000 tonnes, arising from the demands from the Gas Master Plans, replacement of aged pipes and new fields development projects against the current supply opportunity of 100,000MT per annum.

The NCDMB said it is already promoting the establishment of three pipe mills in Nigeria, adding that it has already acquired a portion of land in Bayelsa State to support the establishment of a 250MT pipe mill.

In this regard, the NCDMB said, “Attributes of the land acquired for the pipe mill include nearness to Shell gas plant facility for accessibility to gas; proximity to the Gbaran Ubie National Integrated Power Plant, NIPP, and closeness to River Nun for easy transportation of raw materials and finished goods.

“Steel line pipes are one of the critical inputs in the oil and gas industry in terms of utilisation. It, therefore, has high potential for employment generation; local value addition and retention of industry spend.” Continuing, the NCDMB said from now till 2017, a total of 4.27 million metric tonnes of steel pipes will be needed for exploration and production, gas, water and infrastructure projects in the country, adding that at present, only 10 per cent of this demand can be sourced locally, while 90 per cent are imported.