Cooking Gas Prices Set to Crash as NNPC Signs $550m Deal to Expand Domestic Supply
- The Nigerian National Petroleum Company Limited (NNPCL) has notched another contract to boost domestic gas production
- The NNPCL and TotalEnergies put pen to paper a $550 million gas project to develop the Ubeta gas field
- The Ubeta is a low-emission and low-low-cost development, using OML 58 and existing gas processing facilities
Nigeria is set to increase its domestic gas availability by investing $500 million in the Ubeta gas field development project.
The final investment (FID) was signed by the Nigerian National Petroleum Company Limited (NNPC) and TotalEnergies, the operator of the OML 58 license where the Ubeta field is situated.
Source: UGC
Project will expand Nigeria’s energy security
Reports say the project involves a commitment of $550 million to extract 900 billion cubic feet of non-associated natural gas from OML 58, situated approximately 85 kilometres from Port Harcourt in the Delta region.
The Ubeta project will provide 350 million standard cubic feet daily of gas, mainly meant for Nigeria’s domestic market to make up the operational capacity of NLNG Train 7.
TotalEnergies disclosed that the Ubeta gas field is the latest in a series of projects developed by the company in Nigeria, such as the Ikike and Akpo West.
Mike Sangster, TotalEnergies senior vice president of Africa, Exploration, and Production, said the project aligns with the company’s strategy of developing low-cost and low-emission projects and will contribute to the Nigerian economy through NLNG exports.
Energy analysts believe the project is a significant step in advancing energy security, a vital plank of the Nigerian government’s plans to achieve economic development.
The project aligns with FG’s energy programme
The NNPC Group CEO, Mele Kyari, said that the partnership with TotalEnergies and the Nigerian government has proven highly effective in bringing the Ubeta project to the current stage.
He said the project will ensure a steady gas supply for the domestic market with the NLNG Train 7 and drive economic activities across several sectors at completion.
According to reports, special adviser to the president on energy, Olu Verhijen, said the Ubeta project is a prime example of the kind of investment Nigeria’s reforms seek to attract.
President Bola Tinubu endorsed three presidential initiatives to revive investment in Nigeria’s oil and gas sector, leading to the recent$550 million investment.
BusinessDay reports that the directives include initiatives to promote fiscal incentives for gas utilisation projects, boost the competitiveness of local content, and streamline contracting costs to global standards.
Operations are expected to begin as planned, significantly contributing to Nigeria’s re-emerging position as an essential player in the global energy landscape.
Ubeta gas pipeline holds 300 million cubit
The Ubeta is located in OML 58 and contains a gas condensate field that will be developed with a new six-well cluster connected to the existing Obite facilities through an 11km pipeline.
Production at the facility will begin in 2027, with 300 million cubic feet daily, the equivalent of 70,000 barrels of crude oil.
Gas from the field will be supplied to the NLNG liquefaction plant in Bonny Island with an ongoing capacity expansion from 22 to 30 metric tons per annum, of which NNPC holds a 49% interest.
Cooking gas prices to crash
Ubeta is a low-emission and low-low-cost development, using OML 58 and existing gas processing facilities.
The carbon intensity of the Ubeta project will be reduced via a five-megawatt solar plant currently under construction at the Obite site and the electrification of the drilling rig.
The project adds to the existing gas projects across Nigeria, such as the massive $5 billion NLN Train-7 project employing 8,000 Nigerians, and is about to be completed.
Analysts believe the project, when completed, will contribute to the crash of Nigeria’s gas prices, especially liquified natural gas, also known as cooking gas.
The commodity's price has risen recently, with a kilogram of gas selling above N1,000 compared to the N900 it sold a few weeks ago.
NLNG supplies 493,000 metric tons of LNG to Nigerians
Legit.ng previously reported that the Nigeria LNG Limited (NLNG) stated that it supplies about 1.5 million tons of liquid petroleum Gas (LPG) to the domestic Nigerian market.
The company clarified that it provides nearly 500.000 metric tons of LPG annually to meet local demands.
The development is in pursuit of its commitment to deliver 100% of its LPG production to the domestic market, which was decided by the company’s board of directors.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
PAY ATTENTION: Donate to Legit Charity on Patreon. Your support matters!
Source: Legit.ng
