The Nigerian National Petroleum Corporation (NNPC) Ltd and TotalEnergies have announced a joint investment of $550 million in a new gas processing facility in Rivers State.
The project aims to enhance gas exports and boost domestic supplies, a source within NNPC revealed on Wednesday.
The planned investment encompasses the construction of a state-of-the-art gas processing plant and an extensive pipeline network.
The facility will be situated on the Ubeta onshore gas field, which is co-owned by TotalEnergies and NNPC.
The gas processed at this facility will be supplied to the Nigeria Liquefied Natural Gas (NLNG) plant, a consortium involving NNPC, Shell, TotalEnergies, and Italy’s Eni.
Upon completion, the Ubeta gas processing plant is expected to produce 350 million standard cubic feet of gas per day, alongside 10,000 barrels of associated liquids daily.
This development comes as Nigeria seeks to capitalize on its vast natural gas reserves, estimated at over 200 trillion cubic feet, which remain largely untapped due to inadequate processing infrastructure and capital limitations.
An official announcement regarding the investment is anticipated later this week. Although TotalEnergies has declined to comment, sources close to the agreement confirm that the project reflects a renewed effort by President Bola Tinubu’s administration to attract substantial investment into Nigeria’s energy sector.
“This investment is a clear indication of confidence in Nigeria’s resource potential and the government’s commitment to improving the ease of doing business,” commented Clementine Wallop, Director for Sub-Saharan Africa at political risk consultancy Horizon Engage.
The initiative also aligns with Nigeria’s strategic goals to increase its gas exports, especially to the European Union, which has been seeking alternative energy sources in the wake of reduced imports from Russia due to the ongoing conflict in Ukraine.
Domestically, the project is expected to alleviate some of the supply issues faced by Nigeria’s gas power plants, which are crucial for the country’s electricity generation.
Energy analysts highlight that this project could signify a turning point for Nigeria’s energy landscape, offering a much-needed boost to the country’s economic stability and energy security.
As Nigeria continues to grapple with the challenges of gas flaring and underutilization of its natural gas reserves, the NNPC and TotalEnergies’ investment in the Rivers State gas facility represents a strategic step forward in addressing these longstanding issues.
The successful implementation of this project could pave the way for further investments and advancements in Nigeria’s energy sector.