The Nigerian National Petroleum Corporation (NNPC) Limited has reinitiated discussions with potential investors to revive two significant Liquefied Natural Gas (LNG) projects: the Brass LNG and Olokola LNG.
This development was disclosed by the Chief Financial Officer (CFO) of NNPC, Mr. Umar Ajiya, during the 2024 Gas Technology Conference and Exhibition (Gastech), held in Houston, United States, on Thursday.
The Olokola LNG project, located in Ogun State, is valued at an estimated $9.8 billion, while the Brass LNG project in Bayelsa State is projected to cost $20 billion.
Together, these two massive undertakings represent an investment of approximately $29.8 billion, placing them among the most substantial gas infrastructure projects in Nigeria. Once completed, both projects are expected to significantly increase Nigeria’s liquefied natural gas production capacity by over 22 million tonnes annually.
However, these projects have been hampered for decades due to unfavorable market conditions and delays in political decision-making.
Ajiya acknowledged these historical setbacks, noting that fluctuating gas prices and the high capital expenditure (CAPEX) required to develop the projects had previously deterred investors. He also pointed to the slow pace of political decision-making as a key factor in stalling progress.
READ ALSO: Ukraine Restricts Telegram Use for Officials
“In the past, the economics of the projects, combined with declining gas prices, made them less attractive to investors. The high CAPEX and sluggish decision-making from the political class further delayed their realization,” Ajiya explained during his address.
Despite these challenges, Ajiya emphasized NNPC’s shift toward becoming a commercially driven company focused on timely project development and execution. He highlighted the global abundance of gas resources and stressed the urgency for Nigeria to act swiftly in bringing strategic partners on board.
“The sooner Nigeria makes the right decisions and engages with partners, the better positioned we will be to compete globally,” he said.
Ajiya also praised President Bola Ahmed Tinubu for his efforts to advance new initiatives in the oil and gas industry, particularly through the issuance of Presidential Executive Orders aimed at oil and gas reforms.
The CFO underscored the significance of the Petroleum Industry Act (PIA) of 2021, which has introduced fiscal incentives designed to attract investors and foster a more favorable business environment within the sector.
“The PIA has rekindled hope in the energy industry, offering the much-needed fiscal support and an enabling framework that is essential for large-scale projects like these,” he added.
READ ALSO:
NCC Boost Internet Speed in Nigeria with 6GHz Spectrum Deployment
By resuming talks on the Brass and Olokola LNG projects, NNPC hopes to capitalize on Nigeria’s abundant gas resources and position the country as a major player in the global energy market. The revival of these projects is expected to not only increase gas output but also drive economic growth and development in Nigeria’s oil and gas sector.
The $20 billion Brass LNG project in Bayelsa and the Olokola gas project are set to create thousands of jobs, boost domestic gas demand, generate electricity, and diversify Nigeria’s revenue.
Initiated under President Olusegun Obasanjo, the Brass project aimed to monetize Nigeria’s gas reserves and meet global clean energy demand. However, both projects have faced delays due to the absence of a Final Investment Decision (FID), political challenges, and internal disputes.