Liquefied Natural Gas (LNG)

Nigeria’s NNPC Ltd and Golar LNG announce new FLNG project

NNPC and Golar LNG signed a Project Development Agreement (PDA) on 10 June 2024 in Abuja.

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In a significant move towards harnessing Nigeria’s abundant natural gas reserves, state-owned NNPC Limited has forged a Project Development Agreement (PDA) with Golar LNG for the establishment of a Floating Liquefied Natural Gas (LNG) facility off the shores of the Niger Delta.

Both companies have been in discussions around the launch of FLNG ventures for several months, having already signed a Memorandum of Understand and Heads of Terms for that purpose.

The PDA was signed on June10th, 2024 in the presence of NNPC Limited’s key executives including Chief Financial Officer Umar Ajiya, Executive Vice President for Gas Power & New Energy Olalekan Ogunleye, and Executive Vice President for Upstream Mrs. Oritsemeyiwa Eyesan, alongside Golar LNG’s CEO Karl Fredrik Staubo.

This collaboration represents a significant stride towards commercializing Nigeria’s gas resources, aligning with President Bola Ahmed Tinubu’s vision to expedite the economic exploitation of Nigeria’s gas assets.

The agreement is poised to tap into the extensive proven gas reserves from shallow water resources off the Nigerian coast. The PDA delineates a comprehensive plan for monetization, leveraging approximately 400-500 million standard cubic feet per day (MMscf/d) to produce LNG, LPG, and Condensate.

Both NNPC Limited and Golar LNG have underscored their dedication to achieving a Final Investment Decision (FID) by the close of Q4, 2024, with the aim of commencing gas production by 2027.

Golar LNG Limited, recognized as a leading independent owner and operator of LNG infrastructure, brings its expertise in managing LNG carriers, floating storage and regasification units (FSRUs), and floating liquefaction (FLNG) vessels to this ambitious venture.

The project would be the first FLNG carried by NNPC in Nigeria and follows several such ventures currently under development by the private sector, the most advanced of which is the UTM FLNG.

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NNPC and TotalEnergies announce $550m investment in Nigeria’s Ubeta Gas Field

The Nigerian National Petroleum Corporation and TotalEnergies have announced a $550 million investment decision for the development of the Ubeta Field, a key onshore gas project expected to provide feedstock to Nigeria LNG – Africa’s biggest LNG export terminal. The project is located within OML 58, a TotalEnergies-operated onshore license that frequently suffers production disruptions due to pipeline vandalism and crude theft. The Ubeta field, discovered in 1964 and located northwest of Port Harcourt in the Niger Delta, is projected to produce about 350 million standard cubic feet (MMscf/d) of gas and 10,000 barrels of associated liquids daily. This development is expected to contribute significantly to the supply for NLNG’s Train 7. “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,” TotalEnergies’ Senior Vice President for Africa, Exploration & Production, Mike Sangster, said in a company statement. “Ubeta fits perfectly with our strategy of developing low-cost and low-emission projects, and will contribute to the Nigerian economy through higher NLNG exports.” At the official signing event at NNPC Towers, Group CEO Mele Kyari expressed appreciation for the Tinubu administration’s support in fostering a conducive fiscal environment that has been instrumental in reaching this significant FID. “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. Slated for a 2027 start-up, the Ubeta gas condensate field in OML58 will be developed with a six-well cluster connected by pipeline to the existing Obite treatment plant. The development plan includes a 5 MW solar plant and electrification of the drilling rig to reduce carbon intensity. TotalEnergies and NNPC are also focusing on local content, with more than 90% of manhours expected to be worked locally. The Ubeta Field’s FID marks a significant step in NNPC’s ongoing efforts, supported by the executive branch, to address the challenges that have historically hindered foreign investment in Nigeria’s oil and gas industry. The project is expected to stimulate economic growth, create job opportunities, and generate substantial value for various stakeholders.

Private sector steps up efforts to expand Nigeria’s downstream gas infrastructure

Nigeria’s private sector is driving the expansion of the country’s downstream gas infrastructure in partnership with state-owned NNPC Ltd, with companies like Tetracore Energy Group and Axxela recently launching new compressed natural gas (CNG) and liquefied natural gas (LNG) facilities. Tetracore Energy Group has commissioned a new CNG facility in Ogun State, with a capacity of 3.1 million standard cubic feet per day (mmscf/d). The facility will support gas availability along Nigeria’s Western-Southern corridor, where some of the country’s biggest industrial clusters are located. The facility is expandable to 6.2 mmscf/d, providing room for expansion as demand for gas grows. In addition, Tetracore broke ground on a small-scale LNG plant, which will supply gas to industrial and power customers in Nigeria’s Southwest, South-South, Southeast, and Northern markets. “Tetracore is investing approximately $40 million into the future LNG plant where we are breaking ground today, with commissioning expected at the same time next year,” CEO of Tetracore Energy Group, Kunle Williams, said during a grand ceremony in Ogun State on June 7th. Last week, NNPC and Axela commissioned a CNG plant in Lagos, with a capacity to deliver 5.2 mmscf/d of gas per day, serving around 3,700 cars daily and supplying gas to industries and other companies. The partners also announced plans to build six additional CNG service plants to expand access to alternative fuel for cars and industries. Tetracore and Axxela are representative of increased private sector participation within Nigeria’s midstream and downstream gas space. Seplat Energy, one of the country’s leading independent operators, is currently commissioning the 300 MMscf/d ANOH gas plant, while NIPCO Gas and NNPC have agreed last year to invest in the development of several CNG stations across the country,. The private sector’s investment in gas infrastructure is crucial for Nigeria’s energy and industrialization landscape, as it enables the efficient utilization of natural gas for various sectors, including transportation, power generation, and industrial applications. Nigeria is pivoting toward natural gas as an alternative fuel after eliminating a widely used but expensive petrol subsidy, resulting in a sharp increase in pump prices. The government aims to reduce costs and promote clean energy adoption in Africa’s leading oil-exporting nation by transitioning to gas.