TotalEnergies, NNPC strike $550m deal to boost domestic gas production

Business a.m.

TotalEnergies and the Nigerian National Petroleum Company Limited (NNPC) have joined forces to fund a Final Investment Decision (FID) for the development of the Ubeta gas field. The deal, totaling $550 million, is set to enhance Nigeria’s gas production and provide a vital boost to the nation’s energy supply.

The Ubeta gas field is located in Rivers State, approximately 80 kilometers northwest of Port Harcourt. This vital resource forms part of the Oil Mining Lease 58 (OML 58), a territory that already boasts the Obagi oil field and the Ibewa gas and condensate field.

Once fully operational, the Ubeta gas field is expected to yield 350 million standard cubic feet of gas per day (MMScf/day), as well as 10,000 barrels of associated liquids per day (BBLS/day).

The development of the Ubeta gas condensate field, a six-well cluster connecting to the existing Obite facilities via an 11km buried pipeline, is expected to reach full production by 2027, delivering 300 million cubic feet of gas per day, equivalent to 70,000 barrels of oil per day, including condensates.

The project is designed to be low-emission and low-cost, leveraging existing gas processing facilities at OML 58. A 5MW solar plant is currently under construction at the Obite site to further reduce the carbon intensity of the project.

In addition, gas from Ubeta will be supplied to the Nigeria Liquefied and Natural Gas (NLNG) plant, which is expanding its capacity from 22 to 30 metric tonnes per annum.

TotalEnergies and NNPC have also pledged their commitment to enhancing local content, with more than 90 percent of business hours to be worked locally.

The Ubeta gas condensate field project not only promises a cleaner, greener energy sector but also a renewed economic landscape. In a statement, NNPC foreshadowed a brighter future, underscoring the project’s commitment to Nigerian content, job creation, and value creation.

Anticipation for the groundbreaking Ubeta gas field project reached a fever pitch as the FID signing ceremony unfolded at the NNPC Towers in Abuja. The atmosphere was one of optimism as key industry figures, including Mele Kyari,group chief executive officer of NNPC, expressed confidence in the project. Kyari, a critical player in the landmark event, underscored the government’s instrumental role in facilitating this transformative investment.

“We appreciate Mr. President for supporting us with the appropriate fiscal environment. The Presidential Executive Order is instrumental to us getting to this significant milestone and we are now seeing the impact of the policy,” Kyari said.

Mike Sangster, senior vice president of Africa, Exploration & Production at TotalEnergies, made his presence felt at the FID signing ceremony. Harnessing the full potential of his extensive experience, Sangster underscored the significance of the Ubeta gas field project, an initiative that aligns seamlessly with the company’s mission to accelerate energy innovation and elevate Nigeria’s energy sector

. “Ubeta is the latest in a series of projects developed by TotalEnergies in Nigeria, most recently Ikike and Akpo West. I am pleased that we can launch this new gas project which has been made possible by the government’s recent incentives for non-associated gas developments,” Sangster said.

Heineken Lokpobiri, the minister of state for petroleum resources (Oil), assured Nigerians that the government has rekindled investor confidence in the oil and gas industry, noting that more investments are on the way.

Sharing the same sentiment, Ekperikpe Ekpo,minister of state for petroleum resources (Gas), said the project is a testament to the effectiveness of the government’s policies aimed at creating a conducive environment for investment in the gas sector.

At the forefront of Nigeria’s energy sector, Olu Verheijen, the president’s special adviser on energy,lauded the strategic significance of the project. “The Ubeta project is a prime example of the kind of investment that the government’s recent reforms aim to attract,” she said.

Decrying the untapped potential of Nigeria’s gas reserves, Verheijen highlighted the critical role of the Ubeta project. Citing a staggering 76 percent of undeveloped gas reserves, Verheijen heralded the Ubeta project as a crucial step in the government’s mission to redress this imbalance and steer the nation toward a cleaner, more diversified energy mix.

Verheijen explained further that the Ubeta FID aligns with Nigeria’s overall energy policy which emphasises the development of the gas sector to diversify the country’s energy mix, reduce flaring, and promote cleaner energy sources.