NNPC, TotalEnergies Sign $550M Deal To Boost Domestic Gas Production

NNPC, TotalEnergies Sign $550M Deal To Boost Domestic Gas Production

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Major Investment in the Nigerian Gas Sector

On Thursday, TotalEnergies and the Nigerian National Petroleum Company Limited (NNPC) signed a $550 million Final Investment Decision (FID) for the development of the Ubeta gas field.

This investment marks a major milestone in Nigeria’s oil and gas sector, aiming to boost gas production and contribute to the country’s energy supply.

Location and Production Potential

The Ubeta gas field is located approximately 80 km northwest of Port Harcourt in Rivers State. It is part of the Oil Mining Lease 58 (OML 58), which currently includes the Obagi oil field and the Ibewa gas and condensate field. The Ubeta field, discovered in 1964, is expected to produce about 350 million standard cubic feet per day (MMScf/day) of gas and 10,000 barrels per day (BBLS/day) of associated liquids once operational.

Key Players Speak Out

At the FID signing ceremony held at the NNPC Towers in Abuja, key industry leaders expressed their optimism about the project. Group Chief Executive Officer of NNPC, Mele Kyari, highlighted the government’s role in facilitating the investment.

“We appreciate Mr. President for supporting us with the appropriate fiscal environment. The Presidential Executive Order is instrumental to us getting to this significant milestone and we are now seeing the impact of the policy,” Kyari said.

Mike Sangster, Senior Vice President of Africa, Exploration & Production at TotalEnergies, emphasized the project’s alignment with the company’s strategy. “Ubeta is the latest in a series of projects developed by TotalEnergies in Nigeria, most recently Ikike and Akpo West. I am pleased that we can launch this new gas project which has been made possible by the government’s recent incentives for non-associated gas developments,” Sangster stated.

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Government’s Support and Future Investments

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, assured Nigerians that the government has rekindled investor confidence in the oil and gas industry. “More investments are on the way,” he promised.

Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, echoed these sentiments. “The project is a testament to the effectiveness of the government’s policies aimed at creating a conducive environment for investment in the gas sector,” Ekpo said.

Project Details and Environmental Impact

The Ubeta gas condensate field will be developed with a new six-well cluster connected to the existing Obite facilities through an 11km buried pipeline. Production is expected to start in 2027, reaching a plateau of 300 million cubic feet per day, equivalent to about 70,000 barrels of oil per day, including condensates.

The project is designed to be low-emission and low-cost, leveraging existing gas processing facilities at OML 58. A 5MW solar plant is currently under construction at the Obite site to further reduce the carbon intensity of the project.

Gas from Ubeta will be supplied to the Nigeria Liquefied and Natural Gas (NLNG) plant, which is expanding its capacity from 22 to 30 metric tonnes per annum.

Local Content and Economic Impact

TotalEnergies and NNPC are committed to enhancing local content, with more than 90 percent of business hours to be worked locally.

This effort is expected to stimulate economic activities, create job opportunities, and provide significant value for stakeholders. NNPC stated, “The Ubeta project has a robust Nigerian content plan and is poised to stimulate economic activities, create job opportunities, and create significant value for stakeholders.”

Strategic Importance and Future Prospects

The Special Adviser to the President on Energy, Olu Verheijen, highlighted the strategic importance of the Ubeta project. “The Ubeta project is a prime example of the kind of investment that the government’s recent reforms aim to attract,” she said.

Verheijen noted that 76 percent of Nigeria’s gas reserves remain underdeveloped, and the government’s recent policies are designed to address this gap.

Verheijen also emphasized the project’s alignment with Nigeria’s overall energy policy, which focuses on developing the gas sector to diversify the country’s energy mix, reduce flaring, and promote cleaner energy sources.

“The Ubeta Final Investment Decision also aligns with Nigeria’s overall energy policy which emphasizes the development of the gas sector to diversify the country’s energy mix, reduce flaring, and promote cleaner energy sources,” she explained.

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Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.

Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.

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