Nigeria may be seeing the first major final investment decision (FID) in the oil and gas sector under President Bola Tinubu as President and Minister of Petroleum Resources as the Nigerian National Petroleum Company Limited and Total Energies yesterday sealed a pact for a $550 million Ubeta project.
Aiming to guarantee the supply of gas to the Nigeria LNG train seven expected to cost $10 billion, the project is coming at a time when the oil sector in Nigeria is struggling to attract foreign investors.
Ministers of State for Petroleum (oil and gas), Heineken Lokpobiri and Ekperikpe Ekpo as well as Group Managing Director of NNPC, Mele Kyari, noted the efforts being made to restore investment in the oil sector, adding that more investment is underway.
The new gas project coming from Oil Mining Licence 58 is expected to see the Ubeta project developed with a new 6-well cluster connected to the existing Obite facilities through a 11 km 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 would be supplied to NLNG train seven which is moving NLNG capacity from 22 to 30 Mtpa.
Senior Vice President of Africa, Exploration and Production at TotalEnergies, Mike Sangster said the project became possible due to the Government’s recent incentives for non-associated gas developments.
According to him, Ubeta fits perfectly with the organisation’s strategy of developing low-cost and low-emission projects, adding that it would contribute to the Nigerian economy through higher NLNG exports.
Lokpobiri noted that investors’ confidence is being restored in the oil and gas in the country, adding that Nigeria would see more investment flow into the sector.
Lokpobiri sees the step towards increasing oil production in the country, adding that it would enhance productivity while triggering a chain reaction of value-added services, revitalizing the sector, creating jobs, boosting foreign exchange, and fostering a more vibrant economy.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo said the project remained a testament to the effectiveness of the government’s policies aimed at creating a conducive environment for investment in the gas sector.
“This development will significantly contribute to the stability and growth of our gas industry, a sector that is pivotal for the economic diversification and sustainable development of our nation,” Ekpo said.
Kyari, while noting that the current administration is prioritizing the appropriate fiscal environment, attributed the take-off of the investment as a direct result of the government policy.
General Manager of the Corporate Communication and Zonal Coordination, Esueme Dan Kikile said in line with the Nigerian Content Plan and other commitments agreed upon with TotalEnergies E and P, the Ubeta project would domicile 100 per cent of its project management man hours in Nigeria.
He added that the Front End Engineering Design and Detailed Design would be domiciled 100 per cent in Nigeria and would use Engineering Companies with COREN practicing license.
kikile noted that fabrication and construction would be significantly handled by the country board’s well-established fabrication yards.
