Nigeria is set to increase its domestic gas availability with the announcement of a $550 million investment in the Ubeta gas field development project.
The final investment decision (FID) was signed by the Nigerian National Petroleum Company Limited (NNPCL) and TotalEnergies, the operator of the OML 58 license where the Ubeta field resides.
BusinessDay’s findings showed the project involves 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 the Niger Delta region.
Read also: Inadequate gas supply hampering 24-hour electricity distribution in Aba
Upon its completion, the Ubeta project will provide 350 million standard cubic feet per day of gas, primarily earmarked for Nigeria’s domestic market to augment the operational capacity of NLNG Train 7.
“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,” Mike Sangster, senior vice president of Africa, exploration and production, TotalEnergies, said.
He added, “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.”
Experts say the project signifies a significant step in advancing energy security, a cornerstone of the federal government’s plans to achieve sustained economic development through improved local gas utilisation.
Mela Kyari, group CEO of NNPCL, said collaboration with Total Energies and the Nigerian government has once again proven to be highly effective in bringing the Ubeta project to this 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,” Kyari said at the signing ceremony.
Olu Verheijen, special adviser to the president on energy, said the Ubeta project is a prime example of the kind of investment FG reforms aim to attract.
“Seventy-six percent of Nigeria’s gas reserves remain underdeveloped and 50 percent of this is non-associated gas (NAG). We recognise 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,” Verheijen said.
She said, “Our approach was to respond with data-driven policies, 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 noted that the Ubeta Final Investment Decision (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.
Read also: Ghana faces three-week power outage as gas supply from Nigeria reduces
“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,” Verheijen further said.
In December 2023, President Bola Ahmed Tinubu endorsed three presidential initiatives to revitalise investment in Nigeria’s oil and gas sector, resulting in this $550 million investment.
These directives include initiatives to promote fiscal incentives for gas utilisation projects, enhance the competitiveness of local content, and streamline contracting costs to global standards.
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.
About Ubeta gas project
Located in OML58, the Ubeta gas condensate field will be developed with a new six-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 70,000 barrels of oil equivalent per day including condensates).
Gas from Ubeta will be supplied to NLNG, a liquefaction plant located in Bonny Island with an ongoing capacity expansion from 22 to 30 metric tons per annum (mtpa), in which NNPC Limited holds a 49 percent interest.
Ubeta is a low-emission and low-cost development, leveraging OML58 and existing gas processing facilities.
The carbon intensity of the project will be further reduced through a five-megawatt (MW) solar plant currently under construction at the Obite site and the electrification of the drilling rig.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
