The milestone, according to NNPC Ltd, is in line with President Bola Tinubu's presidential executive order on oil and gas reforms
The Nigerian National Petroleum Company Limited (NNPC Ltd) and TotalEnergies JV on Thursday signed a $550 million Final Investment Decision (FID) on the Ubeta Field Development Project.
The signing of the agreement took place at the NNPC headquarters in Abuja.
The milestone, according to NNPC Ltd, is in line with President Bola Tinubu's presidential executive order on oil and gas reforms aimed largely at improving the investment climate and positioning Nigeria as the preferred investment destination for the oil and gas sector in Africa.
The NNPC Ltd explained that the Ubeta field discovered in 1964, North-West of Port Harcourt in the eastern part of the Niger Delta will, once on stream, produce about 350 million standard cubic feet per day (MMScf/day) of gas and 10,000 BBLS/day of associated liquids, tapping into the vast gas reserves and contributing towards securing gas supply to the Nigeria Liquefied Natural Gas (NLNG).
"Located in OML58, the Ubeta gas condensate field will be developed with a new 6-well cluster connected to the existing Obite facilities through an 11km 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 will be supplied to NLNG, a liquefaction plant located in Bonny Island with an on-going capacity expansion from 22 to 30 Mtpa, in which NNPC Limited holds a 49 per cent interest," the NNPC Ltd said.
Speaking at the signing event, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, said the continuous support of President Bola Tinubu's administration in facilitating a conducive operational environment as a major enabler in achieving this success.
"I am very convinced that many more projects will come alongside this as we progress. And maybe not the right moment to make those announcements, but I know that a number of projects have been enabled by the executive order of Mr President.
"No doubt, this project will create opportunities, jobs, and everything that you can imagine, including making our investment in energy much more productive. I know for sure that the engagements with our other partners will ensure delivery of gas sufficient to keep our train one to seven active and at full capacity, and also realise our ambitions for the train seven.
"We appreciate Mr President for supporting us with the appropriate fiscal environment. The Presidential Executive Order is instrumental to us getting to this significant milestone and we are now seeing the impact of the policy," Mr Kyari said.
Also speaking, the Senior Vice President Africa, Exploration & Production, TotalEnergies, Mike Sangster, said the project is part of the company's strategy to ensure more sustainable energy and less emissions in line with the global energy transition drive.
"Ubeta is the latest in a series of projects developed by TotalEnergies in Nigeria, most recently Ikike and Akpo West. I am pleased that we can launch this new gas project which has been made possible by the government's recent incentives for non-associated gas developments.
"Ubeta fits perfectly with our strategy of developing low-cost and low-emission projects, and will contribute to the Nigerian economy through higher NLNG exports," he said.
In his remarks, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said Mr Tinubu has significantly rekindled investor confidence in the oil and gas industry, assuring Nigerians that more investments are on the way.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo said the project is a testament to the effectiveness of government's policies aimed at creating a conducive environment for investment in the gas sector.
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The NNPC Ltd said Ubeta is a low-emission and low-cost development, leveraging on OML58 existing gas processing facilities.
It said the carbon intensity of the project will be further reduced through a 5 MW solar plant currently under construction at the Obite site and the electrification of the drilling rig.
"TotalEnergies is working closely with NNPC Limited to enhance local content, with more than 90 per cent of manhours which will be worked locally.
"The Ubeta FID justifies the effort invested by NNPC Limited, with unyielding executive support, into tackling the underlying reasons that have plagued the attractiveness of the Nigerian oil and gas industry to foreign investors in recent years.
"The Ubeta project has a robust Nigerian content plan and is poised to stimulate economic activities, create job opportunities, and create significant value for stakeholders," the national oil company said.
