Serrari Group

TotalEnergies SE and the Nigerian National Petroleum Corporation (NNPC) are set to invest $550 million in a new gas processing facility in Nigeria’s Rivers State, according to sources. This investment aims to enhance both export capabilities and domestic gas supply, marking a significant development for Nigeria’s energy sector.

Facility Development and Capacity

The facility will be established on the Ubeta onshore gas field, a joint venture between TotalEnergies and NNPC. It will include a gas processing plant and a pipeline system to facilitate the transfer of gas to the Nigeria Liquefied Natural Gas (NLNG) plant, a consortium comprising NNPC, Shell, TotalEnergies, and Italy’s Eni. Upon completion, the plant is expected to produce 350 million standard cubic feet per day (MMscfd) of gas and 10,000 barrels per day of associated liquids.

Addressing Infrastructure Challenges

Nigeria, which holds Africa’s largest natural gas reserves of over 200 trillion cubic feet, has faced challenges with gas flaring due to insufficient processing infrastructure. The joint investment by TotalEnergies and NNPC is a crucial step towards improving this infrastructure and reducing gas flaring.

Strategic Importance

The investment is strategically important as Nigeria seeks to boost its gas exports to the European Union, which is looking for alternative supplies due to the Ukraine conflict. Domestically, the country also faces challenges in supplying gas to its power plants, which are essential for generating electricity.

Expert Insights

Clementine Wallop, director for sub-Saharan Africa at political risk consultancy Horizon Engage, commented, “The government will hope this investment offers confidence in both the quality of the Nigerian resource base and the government’s pledge to improve the ease of doing business.”

Looking Ahead

This development aligns with President Bola Tinubu’s strategy to attract investments into Nigeria’s energy sector. An official announcement regarding the investment is expected later this week, providing more details on this significant project.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

20th June, 2024

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