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5 Billion USD Offshore Gas Project

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5 Billion USD Offshore Gas Project

Nigeria is at the forefront of major offshore gas pipeline projects. The country estimates its reserves at 203,000 billion cubic feet of natural gas.

Sustainable Gas Supply for the European Market

Nigeria is poised to strengthen its position in the global oil market by leveraging its abundant natural gas reserves through the development of an offshore gas production facility. With an estimated 203,000 billion cubic feet of natural gas, Nigeria is strategically positioned as one of the world’s foremost exporters of liquefied natural gas (LNG).

Central to Nigeria’s aspirations is the monumental 5 billion USD Nigeria LNG Train 7 expansion project. This initiative aims to enhance processing capacity by 35 %, from 22 million tons to 30 million tons per year.

The expansion project will facilitate increased exports of gas to key markets like Europe, where Nigeria has set an ambitious target to dispatch 9.4 billion cubic meters of LNG in 2023 alone.

Recognizing the pivotal role of substantial investment in deepwater gas projects and infrastructure development, Nigeria is committed to accelerating exports and achieving its objectives. The forthcoming Invest in African Energy 2024 Forum, scheduled to take place in Paris on May 14-15, will provide a platform to showcase Nigerian and African investment opportunities in deepwater exploration, gas monetization, and midstream infrastructure. This forum underscores Nigeria’s commitment to attracting investment and fostering growth in its energy sector.

Offshore Gas Production Plan

In response to Nigeria’s appeal for investment, major international oil companies are intensifying their focus on offshore projects. Shell, for instance, has declared its intention to escalate investment in deepwater exploration. The oil giant plans to allocate 1 billion USD over the next decade to enhance Nigeria’s gas supplies. However, Nigeria acknowledges the imperative of fortifying its gas infrastructure to unlock its full potential. Gas monetization emerges as a pivotal strategy to mitigate gas flaring.

The country aims to harness this flared gas for power generation, presenting substantial opportunities for gas-to-electricity infrastructure. Nigeria’s designation of 48 gas flaring sites for commercialization underscores its dedication to expanding the domestic gas market and curbing carbon emissions. This initiative aligns with Nigeria’s broader objectives of sustainable development and energy security.

Major production projects across Africa

In tandem with gas monetization efforts, Nigeria is advancing major pipeline projects, including the Nigeria-Morocco and Ajaokuta-Kaduna-Kano (AKK) pipelines, which traverse 13 West African nations. These projects are crucial for Nigeria’s access to the European market and await final investment decisions. Simultaneously, the AKK pipeline aims to enhance domestic gas transportation, stimulate industrialization, and generate employment, with an anticipated completion date in mid-2024.

As Nigeria’s oil and gas sector assumes greater prominence on the global stage, stakeholders anticipate a period of transformation marked by enhanced infrastructure, heightened investment, and sustained growth in LNG exports. These developments signify Nigeria’s commitment to leveraging its energy resources for economic development and regional integration.

IOCs to double offshore stakes

Nigeria is calling for investment, with a strong focus on deepwater and plans for a licensing round in 2024 to attract new explorers. Supermajor Shell is answering the call, announcing its intention to increase its deepwater investments and invest in the development of Nigeria’s gas reserves.

Its main prospects include extending the life of the Bonga FPSO vessel, developing its Bonga North, Bonga South West and Nnwa Doro assets, and maturing several projects scheduled for commissioning in the short, medium and long term.

Total Energies also began production at the Offshore Gas Mining site in the Akpo West field offshore Nigeria, adding 14,000 barrels of condensate per day and an additional 4 million cubic meters of gas per day by 2028.

Chevron is also increasing its investment in Nigeria’s deepwater, with plans to acquire seismic in several deepwater blocks and expand its Agbami field project. The US multinational has also acquired a stake in the OPL 215 offshore gas development.

As the IOCs redouble their efforts in new exploration and development activities, opportunities are opening up for offshore drilling contractors, service providers and national companies to play an active role in Nigeria’s deepwater renaissance.

Adequate gas infrastructure needed

Gas flaring, estimated to burn about 275 million cubic feet per day by 2023, presents a significant opportunity for power generation in Nigeria, potentially yielding 1.125 GW of electricity. Recognizing this potential, the Nigerian Petroleum Regulatory Commission is taking steps to commercialize 48 gas flaring sites, aiming to expand the national gas market and reduce carbon emissions.

Nigeria’s gas production, particularly from the Offshore Gas Development Plan, is projected to increase to 12.2 billion cubic feet per day by 2030. This growth is supported by major pipeline projects, including the Nigeria-Morocco pipeline and the Ajaokuta-Kaduna-Kano (AKK) pipeline. The Nigeria-Morocco pipeline, designed with a capacity of 3 billion cubic feet per day, traverses 13 West African countries and serves as Nigeria’s conduit to the European market.

Recent discussions between Nigeria and Morocco have focused on expediting the development of the Nigeria-Morocco pipeline, anticipating a final investment decision. Concurrently, the AKK pipeline, capable of transporting up to 2 billion cubic feet of gas per day from southern to central Nigeria, contributes to enhancing domestic gas transportation infrastructure and supports industrialization efforts. These pipeline projects underscore Nigeria’s commitment to leveraging its gas resources for economic development and energy security while promoting regional cooperation in energy infrastructure.

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