Nigeria eyes LNG windfall as NNPC sets to revive $29.8bn Brass, Olokola ventures

Business a.m.

The Nigerian National Petroleum Corporation (NNPC) Limited has initiated renewed dialogue with investors, with the aim of reviving the Brass and Olokola Liquefied Natural Gas (LNG) projects. The resumption of talks signals a renewed commitment to bringing these projects back on track and leveraging Nigeria’s abundant natural gas resources for economic growth.

Umar Ajiya, the chief financial officer (CFO) of NNPC, confirmed the development during the 2024 Gas Technology Conference and Exhibition (Gastech) event, held recently in Houston, United States.

The Olokola gas project in Ogun State and the Brass LNG plant in Bayelsa State collectively carry a hefty price tag of $29.8 billion, making them among the most significant gas infrastructure investments in Nigeria.

The Olokola project, estimated at $9.8 billion, and the Brass LNG plant, valued at $20 billion, are expected to unlock the vast potential of Nigeria’s natural gas reserves and drive significant economic growth in the country.

The NNPC stated that the Olokola gas project and the Brass LNG plant, which are collectively anticipated to add  22 million tonnes per annum to Nigeria’s gas capacity, have been marred by decades of delays due to a combination of unfavorable market dynamics and sluggish decision-making by the political class in the past.

Dwelling on this, Ajiya said:

“In the past, gas prices went down, the economics of the projects meant a high Capital Expenditure (CAPEX), and this was a dis-incentive for investors and partners. Also, there was slow decision-making by the political class.”  

The CFO of NNPC lauded the corporation’s current status as a commercially driven entity, stressing the importance of timely project development and execution. He also emphasised the urgent need for Nigeria to make swift and smart decisions in bringing partners to the table, given the abundance of gas resources in many parts of the world.

“We are also happy to have the Petroleum Industry Act, 2021 (PIA) which has provided fiscal incentives for investors and is creating the enabling environment that has rekindled hope in the energy sector,” he added. 

According to industry analysts, with a massive $29.8 billion investment in the Brass LNG project in Bayelsa State and the Olokola gas project, Nigeria is on the cusp of a transformative era. These projects are anticipated to create thousands of new jobs, revitalise domestic gas demand, bolster the generation of electricity, diversify the federal government’s revenue streams, fortify the country’s overall revenue base, and ultimately elevate Nigeria to a dominant geopolitical player in Africa.

The Brass LNG project, which was originally conceived during the administration of President Olusegun Obasanjo, was designed to capitalise on Nigeria’s immense natural gas reserves and meet the burgeoning global demand for clean energy.

Unfortunately, the project was caught in a quagmire of delays and setbacks due to a lack of decisive action in the form of a Final Investment Decision (FID) and debilitating political gridlock.