The Nigerian National Petroleum Company (NNPC) Limited has signed a deal with a local downstream player to build a natural gas distribution facility with a capacity of 100 million cubic feet a day (MMcfd) in the state of Kogi in Nigeria’s North Central region.
“The gas facility (city-gate) will enable natural gas supply to various domestic LNG facilities, CNG [compressed natural gas] compression and other facilities requiring gas in the Ajaokuta area”, NNPC, which entered into the agreement through NNPC Gas Marketing Ltd. (NGML), said in a statement.
Concurrently, NGML inked another agreement with the project partner, A4E Energy, to supply the latter five MMcfd over 10 years. A4E Energy, which according to NNPC is a homegrown midstream and downstream gas and renewable energy company, will use this gas in its CNG facility and CNG dispensing stations.
‘The gas facility (city-gate) will enable natural gas supply to various domestic LNG facilities, CNG compression and other facilities requiring gas in the Ajaokuta area’.
NNPC is expanding its gas infrastructure to grow both its domestic and overseas reach in the sector. Nigeria’s 2020–30 Decade of Gas initiative aims to make gas the top fuel of the country’s economic development.
Late last year NNPC, local energy engineering company UTM Offshore Ltd. and the Delta government penned an agreement for the construction of the West African country’s first floating LNG plant, as announced by UTM Offshore December 2023. The project, which will exploit the offshore Yoho field, has a planned capacity of 176 MMcfd, according to UTM Offshore.
This year NNPC signed a project development agreement with Golar LNG Ltd. for the deployment of an FLGN facility in Nigeria.
The deal with Bermuda-based Golar LNG “also outlines the monetization plan that will utilize approximately 400-500mmscf/d [million standard cubic feet per day] and produce LNG, LPG [liquefied petroleum gas] and Condensate”, NNPC said in a statement June 2024.
The FLNG will exploit “vast” proven gas reserves in shallow waters of the Niger Delta, NNPC said. The partners plan to reach a final investment decision by the fourth quarter. The start of production is planned for 2027.
NNPC, which exports LNG to Asia and Europe, recently held talks with a South Korean consortium toward a potential agreement to export Nigerian LNG to South Korea.
“South Korea is a major destination for Liquefied Natural Gas exports and the consortium, in collaboration with the Korean Export-Import Bank, has expressed interest in advancing discussions on investing in greenfield and other gas development opportunities, NNPC said January 2024.
“The talks will pave way for the execution of a Memorandum of Understanding that will unlock strategic foreign direct investment in line with the President Bola Ahmed Tinubu administration’s policy of making Nigeria a prime destination for global investors”.
At home, NNPC plans to build three LNG fueling stations, and expects to have over 100 CNG stations by next year, as announced by NNPC Retail Ltd. managing director Huub Stokman last July.
“CNG provides Nigeria with affordable alternatives to existing available fuel products”, Stokman said, as quoted in an NNPC press release. “It will be about 40 percent cheaper than petrol in Nigeria and with continued investments, it will become a significant part of our energy mix”.
Natural gas production in Nigeria has grown 0.3 percent annually in the decade to 2022, with output that year at 40.4 billion cubic meters (1.4 trillion cubic feet), according to the Energy Institute’s 2024 Statistical Review of World Energy.
Associated and non-associated gas reserves in Nigeria stood at 209.3 trillion cubic feet as of the start of 2024, according to a report by the Nigerian Upstream Petroleum Regulatory Commission April 2024.
SOURCE: rigzone.com