$550m NNPC, TotalEnergies JV Ubeta Project Will Boost Domestic Gas Market – FG
The federal government has described the Final Investment Decision (FID) on the 350 million standard cubic feet of gas per day (scfd) Ubeta gas project by the Total Energies EP Nigeria Limited (TEPNG) Joint Venture, comprising the Nigerian National Petroleum Company Limited (NNPCL) and Total Energies as an economic game-changer.
The government described the milestone FID as an affirmation of growing investors’ confidence in the economy and aligns with the recent Presidential Directives on Gas.
According to a statement, the project highlights 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 Nigeria’s Niger Delta Region.
Upon its completion, the Ubeta project would provide 350 million standard cubic feet per day of gas, primarily earmarked for Nigeria’s domestic market and to augment the operational capacity of NLNG Train 7.
The project signifies a significant step in advancing energy security, a cornerstone of the federal government of Nigeria’s plans to achieve sustained economic development through improved local gas utilisation.
In December 2023, President Bola Ahmed Tinubu, had endorsed three presidential initiatives to revitalise investment in Nigeria’s oil and gas sector, resulting in the $550 million investment.
The directives included initiatives to promote fiscal incentives for gas utilisation projects, enhance the competitiveness of local content, and streamline contracting costs to global standards.
Commenting on the latest project, Special Adviser to the President on Energy (SAD-E), Olu Verheijen, said: “The Ubeta project is a prime example of the kind of investment that our recent reforms aim to attract. Seventy-six per cent of Nigeria’s gas reserves remains underdeveloped and 50 per cent of this is Non-Associated Gas (NAG).
“We recognised the urgency of closing this gap through our assessment of the Petroleum Industry Act (PIA) and the new directives, signed by President Bola Tinubu to strengthen the PIA.
“Our approach was to respond with data driven policies, with the aim to reclaim Nigeria’s position as a top destination for returns on investment and ease of doing business, as well as attract new investments, revive dormant ones, and safeguard the industry while creating value for sustained impact for Nigerians.”
She added: “The Ubeta FID also 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.
“The project also has a strong focus on supplying gas to the domestic market and NLNG train 7. Additionally, this project will bring sustainable prosperity through strategic and structured community economic empowerment.
“Overall, we are positive that projects like this will boost confidence and bring more investments to the Nigerian oil & gas sector.”
In his remarks, Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri said Tinubu has significantly rekindled investor confidence in the oil and gas Industry, assuring Nigerians that more investments were on the way.
Also speaking, the Minister of State for Petroleum Resources (Gas) , Rt. Hon. Ekperikpe Ekpo, said the project was a testament to the effectiveness of government’s policies aimed at creating a conducive environment for investment in the gas sector.
Group CEO of NNPCL, Mele Kolo Kyari said the collaboration with Total Energies and the Nigerian government once again proved to be highly effective in bringing the Ubeta project to its current stage.
“As NNPCL and its subsidiaries continue to reposition operations in line with the PIA and the new presidential directives to strengthen it, projects like this will ensure a steady supply of gas for the domestic market as well as the NLNG Train 7, whilst driving economic activities across various sectors during and after its completion. NNPCL is proud to lead this impactful initiative with our partners,” he added.
As the project moves into the development phase, operations are expected to start as planned, significantly contributing to Nigeria’s reemerging position as a critical player in the sustainable global energy landscape and President Bola Tinubu’s commitment to creating a favourable environment for significant foreign and local investments in Nigeria’s oil and gas sector.
For his part, the Senior Vice President of Africa, Exploration & Production, TotalEnergies, Mike Sangster, said, “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.”
According to Sangster, “Ubeta fits perfectly with our strategy of developing low-cost and low-emission projects and will contribute to the Nigerian economy through higher NLNG exports”.
Located in OML58, the Ubeta gas condensate field would be developed with a new 6-well cluster connected to the existing Obite facilities through an 11km buried pipeline. Production start-up is expected in 2027, with a plateau of 300 million cubic feet per day (about 70,000barrels of oil equivalent per day including condensates). Gas from Ubeta will be supplied to NLNG, a liquefaction plant located in Bonny Island with an on-going capacity expansion from 22 to 30 Mtpa, in which NNPC Limited holds a 49 per cent interest.
Ubeta is a low-emission and low-cost development, leveraging on OML58 existing gas processing facilities. The carbon intensity of the project would be further reduced through a 5 MW solar plant currently under construction at the Obite site and the electrification of the drilling rig. TotalEnergies is working closely with NNPC Limited to enhance local content, with more than 90% of manhours which will be worked locally.
The Ubeta project has a robust Nigerian Content plan and is poised to stimulate economic activities, create job opportunities, and create significant value for stakeholders.
Source: thisdaylive.com
