Nigeria said that it will invest $550 million in the Ubeta gas field development project, which will improve the country’s supply of domestic gas.
The Nigerian National Petroleum Company Limited (NNPCL) and TotalEnergies, the owner of the OML 58 license where the Ubeta field is located, inked the final investment decision (FID).
According to TNC’s analysis, the project will cost $550 million in order to produce 900 billion cubic feet of non-associated natural gas from OML 58, which is located in the Niger Delta around 85 kilometres from Port Harcourt.
After it is finished, the Ubeta project will supply 350 million standard cubic feet of gas per day, mostly for the local market in Nigeria in order to increase NLNG Train 7’s operational capacity.
“TotalEnergies has established a number of projects in Nigeria, most recently Ikike and Akpo West, the most recent of which is Ubeta. Mike Sangster, senior vice president of Africa, exploration and production at TotalEnergies, expressed his satisfaction that the government’s recent incentives for non-associated gas ventures had allowed us to begin this new gas project.”
“Ubeta fits perfectly with our strategy of developing low-cost and low-emission projects and will contribute to higher NLNG exports, which will benefit the Nigerian economy,” he continued.
According to experts, the project represents a major advancement in energy security, which is essential to the federal government’s strategies for achieving long-term economic growth through better local gas use.
The Ubeta project has reached this point thanks in large part to cooperation between Total Energies and the Nigerian government, according to Mela Kyari, group CEO of NNPCL.
“As NNPCL and its subsidiaries continue to reposition operations in accordance with the PIA and new presidential directives to strengthen it, projects like this will ensure a consistent supply of gas for the domestic market as well as the NLNG Train 7, while also driving economic activity across various sectors during and after its completion. NNPCL is proud to lead this impactful initiative with our partners,” Kyari stated during the signing ceremony.
The Ubeta project is an excellent illustration of the kind of investment that the FG reforms are intended to draw, according to Olu Verheijen, special adviser to the president on energy.
“Seventy-six percent of Nigeria’s gas reserves remain untapped, with non-associated gas accounting for 50 percent. We understand the importance of filling this gap in our assessment of the Petroleum Industry Act (PIA) and the new orders announced by President Bola Tinubu to enhance the PIA,” Verheijen stated.
“Our strategy was to respond with data-driven policies, to recover Nigeria’s standing as a top destination for returns on investment and ease of doing business, as well as to draw in new investment, rekindle old ones, and protect the sector while generating value for long-term effects for Nigerians,” she continued.
She pointed out that the Ubeta Final Investment Decision (FID) is in line with Nigeria’s broader energy policy, which places a strong focus on the growth of the gas industry in order to diversify the nation’s energy supply, lessen flaring, and encourage the use of cleaner energy sources.
“In addition, this project will offer long-term prosperity to communities through purposeful and structured economic empowerment. Overall, we are hopeful that initiatives like these will increase trust and draw additional investors into the Nigerian oil and gas sector,” she concluded.
This $550 million investment is the culmination of three presidential measures that President Bola Ahmed Tinubu endorsed in December 2023 to revive investment in Nigeria’s oil and gas sector.
These directions include programs to increase the competitiveness of local content, reduce contracting costs to meet international standards and support tax incentives for gas utilization projects.
Operations are predicted to begin as scheduled as the project enters the development phase, greatly bolstering President Bola Tinubu’s resolve to create an environment that is conducive to large foreign and domestic investments in Nigeria’s oil and gas sector as well as Nigeria’s resurgence as a key player in the sustainable global energy landscape.
What To Know About Ubeta Gas Project
The Ubeta gas condensate field, situated in OML58, will be developed with a new six-well cluster that is connected to the current Obite facilities via an 11-kilometre buried pipeline.
With a plateau of 300 million cubic feet per day (about 70,000 barrels of oil equivalent per day including condensates), production is anticipated to begin in 2027.
Gas from Ubeta will be supplied to NLNG, a Bonny Island liquefaction plant that NNPC Limited owns a 49 percent stake in. NLNG is currently expanding its capacity from 22 to 30 metric tons per annum (mtpa).
Ubeta is a low-cost, low-emission development that makes use of OML58 and already existing gas processing facilities.
By electrifying the drilling rig and constructing a five-megawatt (MW) solar plant at the Obite site, the project’s carbon intensity will be significantly decreased.
