The Nigerian National Petroleum Corporation (NNPC) Limited has resumed discussions with investors towards bringing back two Liquefied Natural Gas (LNG) projects, Brass and Olokola LNG projects.
The Chief Financial Officer (CFO) of NNPC, Mr. Umar Ajiya, revealed this during the 2024 Gas Technology Conference and Exhibition (Gastech) in Houston, United States, on Thursday.
The Olokola gas project in Ogun State, valued at $9.8 billion, and the Brass LNG plant in Bayelsa State, estimated at $20 billion, together amount to $29.8 billion, positioning them among the largest gas infrastructure investments in Nigeria.
According to the NNPC, both projects, which are anticipated to boost Nigeria’s gas capacity by over 22 million tonnes per annum, have faced decades of delays due to “unfavourable market dynamics and slow decision-making by the political class in the past.”
Speaking in Houston, Ajiya said:
“In the past, gas prices went down, the economics of the projects meant a high Capital Expenditure (CAPEX), and this was a dis-incentive for investors and partners. Also, there was slow decision-making by the political class.”
While describing NNPC as a commercially driven Company which recognises timely project development and execution, the CFO said there are abundant gas resources in many parts of the world and therefore, the earlier Nigeria makes smart decisions to bring partners to the table, the better
In addition, Ajiya commended President Bola Ahmed Tinubu for his support in driving new projects in the Industry through the Presidential Executive Orders on Oil & Gas Reforms.
“We are also happy to have the Petroleum Industry Act, 2021 (PIA) which has provided fiscal incentives for investors and is creating the enabling environment that has rekindled hope in the energy sector.”
What you should know
The $20 billion Brass LNG project in Bayelsa State and the Olokola gas project are expected to create thousands of new jobs, spur domestic gas demand, generate electricity, create an opportunity to diversify revenue of the Federal government, strengthen the country’s revenue base and turn the country into a dominant geopolitical player in Africa.
The Brass project which was initiated under the administration of President Olusegun Obasanjo, was also projected to help the country monetise part of its vast natural gas reserves and meet the growing worldwide demand for clean energy.
However, the project has been stalled by lack of Final Investment Decision (FID) as well as delays caused by unnecessary bickering, lack of political will.