NNPC/Total JV, Greenville Sign Gas Supply Agreement for $500m Mini LNG Project 

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Chineme Okafor and Nnenna Akuma in Abuja
The Nigerian National Petroleum Corporation (NNPC) and Total Exploration and Production Nigeria Limited (TEPNG) joint venture (JV) on Tuesday signed a domestic gas supply agreement with the Gas Aggregation Company of Nigeria (GACN) and Greenville Oil and Gas for the construction of a $500 million first-of-its-kind mini Liquefied Natural Gas (LNG) plant in Nigeria.

The mini LNG project to be built by Greenville in phases, would when completed reportedly become the first domestic LNG plant in Nigeria, taking up to 74 metric million standard cubic feet per day (mmscf/d) of gas from Oil Mining License (OML) 58 in Obite Rivers State to Grenville’s plant in Rumuji also in Rivers State for liquefaction and distribution to end users across Nigeria.
The gas supply agreement was signed before the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja.

Also in attendance at the meeting were the Managing Director of the NNPC, Dr. Maikanti Baru, represented by Mr. Sam Ndukwe, a senior official of the corporation; the Managing Director of TEPNG, Mr. Nicolas Terraz ; and Chairman Greenville, Eddy Van Den Broeke.
Kachikwu, stated in his remarks that the development of the mini LNG project was in line with President Muhammadu Buhari’s mandate to him to shift Nigeria’s focus from oil to gas, considering that the country was rich in gas resources.

Speaking on the project however, Broeke said the mini plant would be developed in phases, with the first phase costing $500 million of equity investment, while the second phase would take another $350 million.
He explained that the plant will produce gas for domestic use in Nigeria, adding that the electricity, transportation sectors, as well as other industrial users would be served by the mini LNG plant.

“We have just decided to invest in the first three mini LNG plants in Africa, but the big challenge today is that no bank is available to finance this investment because of the temporary problems that Nigeria is going through. We have taken the bold step in saying this country will come back in the next two or three years with the revolution that is going in the country and development of more agriculture,” said Broeke.
He further stated: “It will allow Nigeria to get back to a stronger financial position again. Our project is done with Total Gas, local gas coming from Obite. That means no need for foreign exchange.
Today, we have passed the dark tunnels and we are getting back.

“The investment is around $500 million in the first phase, and we will go up to about $850 million, and completely on equity without any bank financing up till now. We hope that in the second phase, as the minister has said today, more assistance will be given once the people see the investment and once the product come to the market, automatically there will be confidence and we have to build the confidence.”
Meanwhile, Kachikwu, who said the agreement will unlock unbelievable opportunities, noted that: “President Muhammadu Buhari provided this leadership under the seven big wins. Conversations have been on over the last two-three years.”

He further stated: “Our first step was to set up the Nigerian Gas Management Company and Nigerian Gas Pipeline Transportation Company. I am happy that a few months after we launched the gas policy we are seeing this happen. We want to ensure that the payment issues are dealt with and made on time so there is a good financing for the project.”

The minister urged other investors to invest in the gas sector, saying: “We will see what we can do to move this fairly fast from oil-focused to gas-focused zone.”
He stated that most industries in the northern parts of Nigeria were dying as a result of poor power supplies, adding that projects such as the mini LNG plant could help solve the power challenges of the companies in the north .

In his remarks also, the Managing Director of GACN, Mr. Morgan Okwoche, stated that the mini LNG will give a major boost to embedded power generation in the country.
“Additionally, areas that are not easily accessible by the traditional pipelines, can now be reached through virtual pipelines for embedded power generation, which will further aid government’s resolve to ensure an efficient energy mix in the nation’s power sector.

“The project when commissioned will give a boost to the development of Compressed Natural Gas (CNG) as a vehicular fuel. Similarly, LNG fueling stations for LNG trucks will spring up, giving rise to a combined UCNG stations to be built along the Nigerian highways, to ensure trucks can re-fuel when required,” said Okwoche.