Shell has loaded the first crude oil cargo from Nigeria’s new Otakikpo onshore terminal, marking the start of exports from the $400 million facility developed by marginal field operator Green Energy International, according to an Argus report on Monday.

Located in the OML 11 block southeast of Port Harcourt, the terminal has a maximum export capacity of 360,000 barrels per day. Crude is transported via a 23-kilometre, 20-inch pipeline to a single point mooring in the Atlantic Ocean.

The mooring, with a 21-metre draught, is capable of handling Aframax and Suezmax tankers.

Green Energy stated that the terminal replaces a costly barging system that used to cost about $120,000 per day to evacuate production. They added that this new setup is expected to reduce the industry’s rising crude oil production costs by at least 40 per cent.

“The government needs to realise that instead of spending on multiple float stations, this facility offers a home-grown alternative. When oil is stored in tanks, it lowers the cost of production per barrel significantly.

“The operational expenditure is also set to reduce when they are stored in tanks, and the cost of production per barrel will reduce. This facility will ensure that the costs will drop by at least 40 per cent,” the Managing Director of the Otakikpo Oil Terminal, Kayode Adegbulugbe, said in a statement.

Green Energy previously exported its light sweet Otakikpo crude through the Ima floating storage unit, operated by local firm Amni.

According to Green Energy, the new terminal could unlock stranded production from over 40 nearby fields, with a combined capacity of 200,000 barrels per day and estimated reserves of 3 billion barrels of oil equivalent.

The facility can also receive up to 250,000 barrels per day from third-party producers, including through a 6-inch, 6-kilometre offshore pipeline.

Green Energy aims to build a gathering system for crude from other producers and increase storage capacity from 750,000 barrels to up to 3 million barrels.

The company informed the Independent Petroleum Producers Group last week that it can expand tank storage within nine months if demand grows. Currently, the facility is operating at less than 12% capacity.