Nigerian state oil firm NNPC Ltd and TotalEnergies will invest $550 million to develop a gas processing plant in southern Rivers state to boost exports and domestic supplies, an NNPC source said on Wednesday.
The investment will include a gas processing plant and a pipeline, said the source, who is familiar with the deal but could not be named as he was not authorized to speak on the matter.
Total declined to comment.
The NNPC source said the announcement will be made this week.
The gas processing plant will be built on the onshore Ubeta gas field, jointly owned by Total and NNPC, and will supply gas to Nigeria’s liquefied natural gas (NLNG) plant.
NLNG is a consortium between NNPC, Shell, Total and Italy’s Eni.
Once completed, the plant will generate 350 million standard cubic feet per day of gas and 10,000 barrels per day of associated liquids, the source said.
Nigeria, which has Africa’s largest natural gas reserves of more than 200 trillion cubic feet, burns gas from its oil fields because it has no processing infrastructure and faces capital constraints.
The latest investment could mean President Bola Tinubu’s bid to attract investment in Nigeria’s energy sector is starting to succeed, analysts said.
“The Government hopes this provides confidence not only in the quality of Nigeria’s resource base, but also in the Government’s commitment to improving the ease of doing business,” said Clementine Wallop, the firm’s sub-Saharan Africa director. political risk consultancy Horizon Engage.
Energy analysts say Nigeria has failed to increase its exports to the European Union, after the bloc sought alternative supplies to make up for the loss of Russian imports due to the war in Ukraine. Locally, Nigeria is struggling to power its gas-fired power plants that generate the majority of the grid’s electricity. (Reporting by Isaac Anyaogu, additional reporting by America Hernandez in Paris and Ron Bousso in London, editing by MacDonald Dzirutwe and Barbara Lewis)
