TotalEnergies, NNPC plan $550M investment in Nigerian gas facility

Nigeria’s state oil firm NNPC Ltd and TotalEnergies (TTEF.PA) are set to invest $550 million in a gas processing facility in southern Rivers state, aiming to boost both exports and domestic gas supplies, according to an NNPC source on Wednesday.

This investment encompasses the construction of a gas processing plant and a pipeline. The source, who requested anonymity due to a lack of authorization to discuss the matter publicly, indicated that an official announcement is expected this week.

TotalEnergies declined to comment on the development.

The gas processing facility will be established on the Ubeta onshore gas field, co-owned by TotalEnergies and NNPC. It will supply gas to the Nigeria Liquefied Natural Gas (NLNG) plant, a consortium involving NNPC, Shell (SHEL.L), TotalEnergies, and Italy’s Eni (ENI.MI). Once completed, the plant is projected to produce 350 million standard cubic feet per day of gas and 10,000 barrels per day of associated liquids.

Nigeria, which possesses Africa’s largest natural gas reserves exceeding 200 trillion cubic feet, often flares gas from its oil fields due to a lack of processing infrastructure and capital constraints. This new investment is seen as a potential sign of success for President Bola Tinubu’s efforts to attract investment into Nigeria’s energy sector.

“The government will hope this offers confidence not only in the quality of the Nigerian resource base, but also in the government’s pledge to improve ease of doing business,” Clementine Wallop, director, sub-Saharan Africa at political risk consultancy Horizon Engage, said.

Energy analysts note that Nigeria has struggled to increase its gas exports to the European Union, which has been seeking alternative suppliers to replace Russian imports amid the Ukraine war. Domestically, Nigeria faces challenges in supplying its gas power plants, which are crucial for the majority of its grid electricity.

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