Nigeria: Chevron Escravos Project to Supply 26% of Nigeria's Domestic Gas - Official

26 December 2019

The multi-billion-dollar Chevron Escravos Gas-to-Liquid (EGTL) project will supply about 400 million standard cubic feet per day to the Nigerian domestic gas market, an official has said.

The project being executed in partnership with the Nigerian National Petroleum Corporation (NNPC) will account for an equivalent 26 per cent of total domestic gas supply in the country.

The Group Managing Director of the NNPC, Mele Kyari, disclosed this at a sign-off meeting in Abuja to execute gas supply agreements between Chevron Nigeria Limited (CNL) and the corporation.

The settlement agreements were signed at the NNPC headquarters in Abuja on December 24 on behalf of the two companies.

Mr Kyari signed for the NNPC, while Monday Ovuede, Director of the NNPC/CNL Joint Venture, represented Chairman/Managing Director of CNL, Jeffrey Ewing.


Under the new agreement, the EGTL interest will be aligned with the Joint Venture Upstream interest at NNPC 60 per cent:CNL 40 per cent, with CNL as the operator of the asset.

The EGTL Project is expected to boost Nigeria's domestic gas utilisation.

Mr Kyari described the CNL EGTL plant as "a cornerstone of the energy ecosystem of Nigeria."

He said the gas plant has the potential to provide about $2 billion into the coffers of the federal government.

The NNPC GMD expressed appreciation to the NNPC and CNL teams as well as the Senate, for their roles in the successful resolution of the EGTL project 'dispute'.

"The project will see CNL supply an average of 400 million metric standard cubic feet of gas (mscf/day), equivalent of 26 per cent of total domestic gas supply, the highest by any international oil company (IOC) in the domestic market.

"In all, the EGTL will bring loads of benefits to the Nigerian economy as well as to CNL: energy supply, improved gas utilization, fiscal receipts and a renewed social license to operate," he added

Meanwhile, the Chief Executive Officer of CNL, who was represented by the Director, NNPC/Chevron Nigeria Limited Joint Venture, Mr Ovuede, said the project would open up opportunities for gas commercialisation and monetisation in the Oil and Gas Industry.

Mr Ovuede said one of the values would include provision of clean and environmentally friendly energy.

He assured of his organisation's commitment to foster mutually beneficial relationship with the corporation in the energy sector.

He said the executed agreements resolving the 'historical disagreements' between NNPC and CNL over the EGTL project also signalled the implementation of a new governance model.

The signing of five sets of agreements included the Settlement Agreement; Amendment to the Venture Agreement; Sales and Purchase Agreement; Depository Agreement for Special Purpose Vehicle; and Agreement for Power of Attorney to be given to CNL as the representative of the Sellers.

Mr Ovuede said the EGTL is part of an integrated gas development strategy, along with the Escravos Gas Project (EGP3).

He said the project remains a critical part of the overall NNPC/CNL Joint Venture gas commercialisation strategy.

Also, he expressed the commitment of CNL to the efficient and safe operation of the EGTL and the development of the petroleum industry in Nigeria.

The EGTL plant, located in Escravos, the Western Niger Delta, started technical operations in 2014.

It is designed to convert feed gas from the JV fields to high quality diesel and naphtha with a maximum output of 33,200 barrels per day.

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