The proposed project, which is still at the feasibility and preliminary assessment stage, is expected to have a production capacity of about three million tonnes of LNG annually, subject to technical studies, regulatory approvals and a final investment decision.
The company is evaluating potential locations around the Escravos area of Delta State and Akwa Ibom, with the final site expected to be determined after the ongoing feasibility studies.
NIPCO Gas Managing Director, Nagendra Verma, said the project was being assessed based on access to upstream gas resources, LNG processing facilities, marine transportation and both domestic and international markets.
The proposed development would include an FLNG facility as well as associated marine and export infrastructure capable of supporting supplies to overseas markets and Nigeria’s growing domestic LNG market.
NIPCO has been evaluating the project for between six and nine months, with its current assessment covering gas reserves and supply, FLNG technology, production capacity, marine infrastructure, shipping and logistics, domestic supply opportunities, project economics and financing options.
“We are considering various development concepts, technology solutions, financing structures and commercial options with a view to establishing a technically robust and commercially sustainable project,” Verma said.
The company is also exploring a potential strategic partnership with the Nigerian National Petroleum Company (NNPC) for the development of the project.
NIPCO said the LNG initiative formed part of its broader strategy to expand its participation in Nigeria’s natural gas value chain and increase the use of gas as a cleaner fuel.
The company said it had invested about $2bn in Nigeria’s oil and gas industry, with interests spanning pipeline infrastructure, compressed natural gas facilities, fuel retail outlets, petroleum product infrastructure, LPG and propane facilities, logistics and distribution.
NIPCO Group Executive Director, Corporate Services, Abdulkadir Aminu, said the proposed project could also support greater local utilisation of Nigerian gas and reduce some costs associated with imported LNG products.
He said local production could eliminate or reduce expenses linked to overseas freight, insurance, clearing and other landing charges, potentially improving the cost structure of locally produced gas products.
The company said it would continue consultations with government agencies, regulators, upstream and midstream operators, technology providers, financial institutions and other stakeholders as the project progresses.
“If indigenous construction is done, then there is no impact on the importation or the fluctuation of the dollar exchange rate, and no duty or anything.
“Obviously, when any product is being manufactured locally, the pricing is expected to be low compared to the imported price or imported product.
“The aim of doing the project is to get relief to the masses. First is the maximum utilisation of the indigenous gas, more and more monetisation, deepening of the gas utilisation, and reach to the masses,” he said.
Discussion0