PIPELINE TRANSPORTATION AND ITS SIGNIFICANCE TO THE MARKETING OF PETROLEUM PRODUCTS IN SOUTH EAST, NIGERIA

PIPELINE TRANSPORTATION AND ITS SIGNIFICANCE TO THE MARKETING OF PETROLEUM PRODUCTS IN SOUTH EAST, NIGERIA

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Pipeline transportation is the newest among the other means of transportation in South East, Nigeria. Much attention has not been given to it owing to the following factors; firstly, it is relatively a recent origin secondly, its’ operations and services are not in the lands of private individuals and companies. Hence, everything about pipeline transportation in Nigeria is strictly in the hands of the Federal Government.

Nigeria’s economy is dominated by the oil and gas sector. In 2004, this sector accounted for about 80% of all government revenue, 90-95% of export revenues, and over 90% of foreign exchange earnings (Aluko, 2004).The country is Africa’s leading oil producer and at a global level, ranks among the top 10 oil producers (Olokesusi, 2005). Most of the oil and gas is produced in the Niger Delta Region, presently defined by the political boundary of nine statesi - Abia, Akwa-Ibom, Bayelsa, Cross-River, Delta, Edo, Imo, Ondo and Rivers.


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According to Kupoliyi (2000: 98), pipeline has been in use for transporting materials for centuries. He further stated that, pipeline are used for distributing potable water in urban areas. Though the pipelines network for the transportation and distribution of water in urban areas are usually short, they use the same basic principles as the ones for distributing petroleum products.

From the above, it is ascertained that pipelines were first used for distributing potable water, later; they were used for moving gases and a variety of liquids within plants as well as locations apart. Today pipelines are widely used for transporting petroleum products and some liquids over long distances.

Olakunori (2000:208) reported that petroleum pipelines made recent discovering into Nigeria. According to him, the products pumped through the Nigeria pipelines include the following:

•         Premium motor spirit (PMS) otherwise known as petrol;

•         Automotive Gas Oil (A G 0), otherwise known as diesel;

•         Household Kerosene, (HHK).


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In additions to these, aviation turbine kerosene (ATK), otherwise known as avgas, is pumped from Mosimi to Abuja to Ikeja Airport regularly. Pumping is done in batches of between 15,000 to 50,000 cubic metres in such a way as to avoid contaminations. Delivery of the various products’ grades into storage depots is strictly monitored and controlled from the control centres located in Mosimi, Warrri, Kaduna and Port Harcourt (PPMC 1996:4). Once pumping begins and a product leaves the refinery tanks, its arrival time at any particular depot like Aba can easily be forecasted.

Liquidified natural gas (LNG) is pumped through the Escravos-Lagos pipelines (ELP) dedicated to gas. At orasent, is the only operational gas pipeline that has been completed in the country (Adeyinka 2000:43).

According to Ndukwe (2000:5) the pipeline network is divided in five system — 2A, 2B, 2C, 2D,and 2E which are serviced by pump stations at Altas Cove, Mosimi, Ibadan, Kaduna, Zaria, Jos, Gombe, Escravos, Port Harcourt and Enugu. There are also booster pump stations at the Warri — Kaduna pipeline at Abudu, Auchi, Lokoja, Abuja, Izom and Sarkin Pawa. According to Amodu (2000:19) the existing arrangement for distribution of patrol, begins with the four refineries, Port Harcourt I and II, Warri and


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Kaduna. The products from these refineries are distributed nationwide through a system of strategic storage depots, booster or pumping stations, some jetties and a network of pipelines. He further explain that from the eastern axis, pipelines from port Harcourt refinery lead to Aba pumping station, and then to Enugu which is both a storage depot and pumping station, and then on the another depot at Makurdi. From the Western axis, pipelines lead from Warri refinery to storage depot at Benin, then to ore and Ikorodu/Lagos to Ibadan and on to Ilorin. A special pipeline for Crude only lead from Warri through Benin to Auchi and on to Kaduna. From the northern axis, pipeline lead from Kaduna refinery and storage depot to Zaria, Gusau, Kono, Jos, Gombe and Maiduguni with pumping stations at Zania, and Jos.

According to Udensi (1999:27), the Nigeria government intends to extend the gas pipeline to other West African Countries in order to encourage gas utilization and exploit the commercial opportunities in the sub-region. Some of these countries are:

•            Togo

•            Ghana

•            Benin Republic


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•            Mali

•            Sierra Leone

•            Gambia

•            Burkina Faso

•            Cape Verde

According to Ike (1999:106), the construction of Phases I- III pipeline system enables Nigeria Government to achieve the following objectives:

i.       Provision of additional distribution depots at Sulaja, and Minna.

ii.     Connection of Kaduna Refinery products depot with the refineries

at  Port

Harcourt  and  Warn,  not  only  to  make  up


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