The Nigerian National Petroleum Corporation (NNPC) Limited has signed a significant deal with a North American firm, Golar LNG, to float Liquefied Natural Gas (LNG) offshore in Niger Delta region.
The spokesperson for NNPC, Olufemi Soneye, made this disclosure in a statement on Monday in Abuja.
Floating LNG (FLNG) refers to the process of liquefying natural gas at sea (offshore) rather than on land.
Soneye said the Project Development Agreement (PDA) aims to utilize approximately 400-500mmscf/d and produce LNG, LPG (cooking gas) and Condensate in the country.
He also mentioned that the agreement aligns with President Bola Tinubu’s commitment to swiftly commercialize Nigeria’s gas resources, fostering economic prosperity for the nation.
“The PDA is another major milestone achievement towards ensuring gas commercialization through deployment of an FLNG Facility in Nigeria, which is in line with Mr. President Bola Ahmed Tinubu’s resolve to rapidly commercialize Nigeria’s gas assets for the economic prosperity of the Nation.
“The agreement aims to monetize vast proven gas reserves from shallow water resources offshore Nigeria.
“The PDA also outlines the monetization plan that will utilize approximately 400-500mmscf/d and produce LNG, LPG and Condensate,” he said.
FID to be reached at fourth quarter of 2024
In addition, Soneye said while the initial project development agreement was sealed by both parties— NNPC and Golar— the final agreement is expected to be concluded before the fourth quarter of this year.
Final Investment Decision (FID) indicates the point at which the project owners have committed to investing funds to proceed with implementation.
Soneye said after the FID is concluded, the first production of gas will be expected by 2027.
“The Partners, NNPC Limited and Golar LNG have both expressed their commitment to achieve Final Investment Decision (FID) before end of Q4, 2024 and first gas by 2027.
“Golar LNG Limited is a renowned independent owner and operator of LNG infrastructure, including carriers, floating storage and regasification units (FSRUs), and floating liquefaction (FLNG) vessels,” Soneye said.
What you should know
The shift from oil to gas diversification in Nigeria’s oil and gas sector has been underway for decades, driven by the country’s abundance of gas reserves compared to crude oil reserves.
According to latest data by the Nigerian Upstream Regulatory Commission (NURPC), Nigeria’s crude oil reserves stands at 37 billion barrels. On the other hand, the country has a gas reserve of about 202 trillion cubic feet (tcf) and recoverable of about 139.4.
The shift to gas has also been consolidated by president Tinubu with the signing of new executive orders to boost the gas industry in the country.
President Tinubu also inaugurated three different gas plants, aiming to boost gas production in the country by at least 25%.
The gas plants are located in Delta and Imo respectively.
In addition, the president said that the country will be moving towards CNG-powered vehicles as part of his initiative to wean off the country’s dependence from petrol to gas-dependent transportation system.