VZCZCXRO3323
PP RUEHMA RUEHPA
DE RUEHUJA #1328/01 2031018
ZNR UUUUU ZZH
P 221018Z JUL 09
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 6612
INFO RUEHOS/AMCONSUL LAGOS 1701
RUEHJO/AMCONSUL JOHANNESBURG 0069
RUEHZK/ECOWAS COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 ABUJA 001328 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS AID AFR/SD FOR CURTIS, ATWOOD AND SCHLAGENHAUF 
DEPT PASS TO USTDA-PAUL MARIN, EXIM-JRICHTER 
DEPT PASS TO USTR-AGAMA 
JOHANNESBURG FOR NAGY 
DEPT OF ENERGY FOR PERSON 
TREASURY FOR PETERS, SOLOMON AND RITTERHOFF 
DEPT PASS TO USAID/AFR FOR ATWOOD AND SCHLAGENHAUF-EGAT/I&E/E 
USDA/FAS/OTP FOR MCKENZIE 
DEPT FOR OES/EGC FOR WMOORE AND FOR EEB/ESC/IEC/ENR DHENRY 
DOC FOR 3317/ITA/OA/BURRESS, 3130/USFC/OIO/ANESA/HARRIS 
 
E.O. 12958: N/A 
TAGS: EPET ENRG ECON SENV EIND EINV TRGY TPHY NI
SUBJECT: NIGERIA: MINISTER TAKES ACTION ON GAS FLARING 
 
REF: A. ABUJA 1209 
 ¶B. ABUJA 1096 
 
ABUJA 00001328  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED; BUSINESS PROPRIETARY INFORMATION; NOT 
FOR DISSEMINATION OUTSIDE USG 
 
¶1. (SBU) Summary:  Minister of Petroleum Resources, Dr. Rilwanu 
Lukman is seriously discussing the installation and promotion of a 
Gas to Liquid (GTL) process developed and patented by Synfuels 
International in cooperation with Texas A&M University.  Lukman 
would like to purchase the equipment and install a pilot plant to be 
sure that this new U.S. technology performs as reported.  According 
to the information presented at the Ministry, the cost to purchase 
and erect this American technology plant is scalable by size; the 
presentation attended by EconOff at the Ministry on July 14 
suggested project costs at approximately $250 million (reftel A). 
The liquid gas or alternately ethylene, produced through the 
process, can be sold directly to suppliers or used right at the 
plant location in an industrial activity, which if planned properly 
could lead to the creation of sustainable economic growth, reduce 
poverty, and build healthy communities (reftel B).  It seems natural 
for the USG to embrace this opportunity to develop a study to bring 
a planned and sustainable economic outreach to the Niger Delta and 
also encourage more purchases of U.S. products and services.  End 
Summary. 
 
NEW U.S. TECHNOLOGY TO SOLVE NIGERIA'S GAS FLARING 
--------------------------------------------- ----- 
 
¶2. (SBU) EconOff attended a GTL presentation at the Ministry of 
Petroleum Resources on July 14 where the Minister of Petroleum 
Resources Dr. Rilwanu Lukman and Dr. Emmanuel Egbogah, Special 
Adviser to the President on Petroleum Matters, attended part of the 
meeting.  Lukman is seriously discussing the installation of a new 
GTL process patented by Synfuels International, which was developed 
in cooperation with Texas A&M University.  Lukman would like to 
purchase and install a pilot plant in Nigeria's Delta region to test 
how this new U.S. technology performs.  The cost to purchase and 
install this American technology is scalable by size and costs at 
approximately $250 million, according to information provided at the 
presentation (reftel A).  The main purpose of the plant is to 
process gas now being flared and turn it into either a liquid fuel 
such as 95 octane grade gasoline, diesel, or jet fuel, or 
alternatively, the process could produce ethylene, a chemical 
compound that can be used to produce plastic and other products. 
The process provides its own power source, with excess electricity 
for use in a manufacturing process or for light and power to a 
nearby community.  The by-product of the GTL process is potable 
distilled water generated at a rate of about 60 gallons per minute. 
 
 
A BOOST FOR A NEW & SUSTAINABLE WAY OF LIFE IN THE DELTA 
--------------------------------------------- ---------- 
 
¶3. (SBU) The pilot project for the GTL technology offers an 
opportunity to six southern Delta states, referred to simply as the 
south-south region, i.e. Bayelsa, Rivers, Akwa Ibom, Cross River, 
Edo, and Delta States.  The region is a low-lying land of 
innumerable creeks, waterways and mangrove swamps which stretch for 
over three hundred miles and is blessed with a variety of natural 
resources including abundant low sulfur oil and natural gas.  The 
region continues to suffer a severe lack of basic social and 
economic infrastructure and widespread poverty and unemployment that 
contribute to social and political frustration.  The GTL plant 
offers a way to convert a global pollution problem, gas flaring, to 
an investment in physical and human capital such as engineering, 
fabrication/manufacturing, logistics and training, which will lead 
to the creation of sustainable regional wealth, reduce poverty, and 
build healthier communities. 
 
¶4.  (SBU) The idea of a cluster development approach in deploying 
the GTL technology within the communities of the Delta has been 
discussed, but does not have a sponsor to spur it forward (reftel 
B).  Technical support from the USG toward building the GTL plant 
 
ABUJA 00001328  002.2 OF 002 
 
 
will pay off in the long run as the GON and various Delta states 
would be convinced of the value of the technology to address 
environmental degradation as well as spur economic growth; also 
sponsoring a study, a blueprint guide specific to the selected site 
for the GTL plant.  Harvard University Professor Michael Porter 
defines a business cluster as a geographic concentration of 
interconnected businesses, suppliers, and associated institutions in 
a particular field.  A cluster study for an identified location in 
the Delta would also take into account job creation, training, 
prefab or modular buildings, sanitation, utilities, suggested policy 
to guide controlled development and reduce environmental pollution, 
and avoid shanty town type outgrowth as experienced in Lagos. 
 
¶5. (SBU) Comment:  The problems of the Delta are well known; they 
play themselves out in the international press in stories of local 
criminals who either directly steal oil in a "bunkering" process or 
alternatively decide to blow up oil and gas infrastructure pipelines 
and facilities.  The residents of the Delta states are surrounded by 
escalating pollution as a result of these criminal activities and 
become ever more impoverished.  Engaging civil society, and 
promoting education and business development can be accomplished as 
a side benefit of the reduction of gas flaring and development of 
gas-for-power and gas-to-liquids.  Other GTL activities include 
Chevron and ExxonMobil.  Chevron is building a large GTL facility in 
Escravos, which will produce diesel at about 300 million standard 
cubic foot day.  Exxon signed a memorandum of agreement with the 
Nigerian National Petroleum Corporation in June 2008 to study 
building a GTL plant producing gasoline.  The Synfuels technology 
allows processing at the well head where the community can benefit. 
It seems natural for the USG to embrace this opportunity to bring 
economic outreach and development to the Delta and also encourage 
purchases of U.S. products and services.  Time is critical.  End 
Comment. 
 
¶6. (U) This cable was coordinated with Consulate Lagos. 
 
SANDERS