THE OPERATION OF PIPELINE MODE OF TRANSPORTATION IN NIGERIA
CHAPTER ONE INTRODUCTION
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.
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).
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
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:
- Benin Republic
- Sierra Leone
- 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:
- Provision of additional distribution depots at Sulaja, and Minna.
- Connection of Kaduna Refinery products depot with the refineries at Port Harcourt and Warn, not only to make up the production shortfall but also to ensure the continued supply of produces to the Northern areas in the event of Kaduna Refinery outage.
- Constructions of facilities to enable products to be pumped from Port Harcourt to the Western areas via Benin for continue supplies in the event of total outage.
- Putting in place some alternations, upgrades and repairs within the existing system necessary to accommodate the new facilities.
- The de-Bottleneck of limited capacity of the existing 6 inches diameter pipelines between Jos and Gombe.
In addition, with the completion of the petroleum products pipelines and storage depots strategically located nationwide. The products are moved through the pipelines by pumping using mainline and booster pumps.
Observation here is to know whether or not pipelines are reliable means of distributing and marketing of petroleum products.
STATEMENT OF THE PROBLEM
Transporting petroleum products through a network of pipelines in Nigeria appears very worrisome. Problems ranging from scarcity of petroleum products, pipeline vandalization, aging pipelines and many others loom the country’s oil industry. Of what significance then is the pipeline transportation mode to the marketing or distribution of petroleum products in the country if the utmost need of regular supply of petroleum products to all parts of the country is not met?
In a country like United States where more crude oil is imported than produced domestically, pipelines are the irreplaceable core petroleum transportation system and the key means to meeting petroleum demand of millions of consumers in all the fifty states of the country. About 19.5 million barrels of petroleum products are consumed per day (b/d) by the consumers yet there has never been a cry of fuel scarcity in the country.
One truth about Nigerian’s case is not far from the greed among the management of Nigerian National Petroleum Corporation. Originally, pipeline transport speed is dependent upon the diameter of the pipe, the pressure under which the oil is being transported, and many other factors such as the topography of the terrain and the viscosity of the oil being transported but recently in 2010, NNPC management proposed to develop several new domestic 48 inch diameter pipelines. This could mean that there was a realization that small diameter pipelines were laid and used to transport petroleum products throughout the country and might have been responsible for the scarcity of petroleum products encountered in the country several years ago. In the U.S., consumers’ needs preclude the oil industry from being monolithic. Supply pattern is in diversity. Pipelines serve different regions with different consuming patterns even within a region.
Larger and smaller diameter pipelines are complementarily used to transport petroleum products to farther and shorter distances. The idea that Pipeline and Product Marketing Company (PPMC) is NNPC’s sole subsidiary for distributing refined petroleum products to all depots in the Nigeria makes the whole system monolithic. Sometimes there are ulterior motives among the management of the PPMC regarding the volume of
petroleum products to be pumped to the depots in each regions of the country.
Apart from the foregoing, most of the pipelines used for transporting petroleum products in the country are products of 15 to 20 years. Some have been exposed through the washing away of the soil covering them by erosion. In short some the pipelines are rust, old at look, thereby making it vulnerable for easy vandalisation or corrosion.
In the light of these problems, the need to ascertain the significance of pipeline transport mode for the marketing or distribution of petroleum products in Nigeria cannot be overemphasized.
OBJECTIVE OF THE STUDY
The main objective of this study is to explore The Operation Of Pipeline Mode Of Transportation In Nigeria while the specific objectives however are:
- To determine the effect of the use of pipeline transport mode on the availability of petroleum.
- To identify the major challenges confronting pipeline transportation of petroleum products
- To determine the relative effect of pipeline vandalization; capacity underutilization; and PPMC management ulterior motive; on the scarcity of petroleum products in South-East Nigeria.
- To determine the strategies for effective management of petroleum products pipeline transportation.
- What effect does the use of pipeline transportation mode have on the availability of petroleum products in South East Nigeria?
- What major challenge(s) confront pipeline transportation of petroleum products to southeast Nigeria?
- Do pipeline vandalisation, capacity underutilization and PPMC management ulterior motives have any significant relative effect on the scarcity of petroleum products in South East Nigeria?
- What strategies can effectively aid management of pipeline transportation of petroleum products in South East Nigeria?
- Pipeline transportation mode does not have significant effect in the availability of petroleum products in Southeastern Nigeria.
- Pipeline diameter and pipeline vandalisation are not the major challenges confronting petroleum products transportation through pipeline
- Pipeline vandalisataion; capacity underutilization; and PPMC management ulterior motive do not have significant relative effect on the scarcity of petroleum products.
- Replacing the petroleum products pipelines with the ones with wider diameter and controlling the transportation operations remotely are not effective strategies for aiding management of petroleum products pipeline transportation in southeast Nigeria.
SIGNIFICANCES OF THE STUDY
The findings and recommendations to be made in this study when implemented will benefit all Nigerians as well as the government.
The recommendations of this study will reduce the incidence of pipeline vandalization in South East, Nigeria. In addition, the problem of fuel scarcity will equally be eliminated. Thus the average Nigeria will have access to petroleum products at a reduce cost anytime, anywhere. Also, it will provide knowledge for good policy formulation and better management of petroleum products.
SCOPE OF THE STUDY
The scope of this study borders on pipeline transportation and its relevance to the marketing of petroleum products. This research will be limited to the Enugu and Aba offices of Nigeria National Petroleum Corporation (NNPC).
LIMITATIONS OF THE STUDY
In carrying out this research many factors served as constraints:
- The limitation of the research scope to just pipeline transportation at its relevance to the marketing of petroleum products.
- Time Limitation: time factor constitutes of the major limitation of this research study. It relates to the fact that the time for this research work was short due to combination of lectures, studies and examination.
- Negative attitude of respondent.
Adeyinka, H. (2000), Introduction to Commerce, Ibadan: Spotlight Books
Amodu (2000), The challenges of Pipeline Transportation, Unpublished project report, University of Benin.
Ike, S E (2009), Pipeline of Transportation Management for Nigeria Schools, Lagos: Empire Publication ltd.
Kupuloyi A. 0 (2000), Proposals for effective marketing of Petroleum Product in Nigeria, Unpublished project report, University of Jos.
Ndukwe .B. (2000), Distribution Arrangement for Petroleum Products in Nigeria, Lagos: Chuks Publishers.
Olakumori K.0 (2000), Transportation management, Second Edition, Enugu: Giovanni publishers.
PPMC. (1996), Investment and Business Guide, Lagos: public Affairs Department, PPMC Ltd
Udensi I. (1999), Petroleum Resources and Economic Development in Nigeria, Calabar: Global Press.