A Review of the Nigerian Energy Industry

LNG: Nigeria signs GSA agreement with Total, Indorama

*Dr. Emmanuel Ibe Kachikwu.

Oscarline Onwuemenyi

15 December 2017, Sweetcrude, Abuja – The Federal government on Friday signed a landmark Gas Sale and Aggregation Agreement with three companies in the oil and gas industry to boost the delivery of gas to a mini-LNG facility in Rivers State.

The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu signed the agreement on behalf of the government with the management of the Total E&P Nigeria Ltd. JV, Indorama Eleme Petrochemical Limited, and the Gas Aggregation Company Nigeria Limited in the signing of the agreement.

In his remark, Dr. Kachikwu applauded the tenacity of the management teams of the organizations and the leadership provided by the Managing Director of the GACN, Mr. Morgan Okwoche, Managing Director/Chief Executive of Total E&P Nigeria Ltd, Mr. Nicolas Terraz and the Chief Executive Officer of Indorama Eleme Petrochemical Limited, Mr. Munish Jindal.

According to a statement posted on the ministry’s Facebook page, the Minister of State further highlighted the vast opportunities that will be occasioned by the Gas Sale and Aggregation Agreement while encouraging deepened collaboration in the entire chain of the oil and gas sector.

In August this year, sector recorded a milestone in the development of Nigeria’s gas market with the execution of a N259 billion Gas Sale and Aggregation Agreement (GSSA) for the delivery of 74 million standard cubic feet (MMscf) of gas to the Greenville Oil and Gas Company Limited (Greenville) US$500m Mini-LNG facility in Rumuji, River State.

The signing of the agreement which was supervised by Dr. Kachikwu, had in attendance the representatives of Nigerian National Petroleum Corporation (NNPC), Total Exploration and Production Nigeria Limited (TEPNG), of Greenville Oil and Gas Company Limited (Greenville) and Gas Aggregation Company of Nigeria (GACN). Also in attendance was the Executive Committee of the Nigeria Gas Association (NGA) led by its President, Mr. Dada Thomas.

The event is a significant milestone in the development of Nigeria’s gas market as it underpins gas supply to the first domestic LNG project. Gas supplied to Greenville by the NNPC/Total Joint Venture will be processed into Liquefied Natural Gas (LNG) at the Company’s mini – LNG facility, the first of its kind in Africa.

This development allows for the transportation of gas to various locations and stranded industries around the country through a virtual pipeline of specialized LNG trucks and presents an option to gas supply through the existing pipeline network.

The NNPC/Total Joint Venture will fulfill its Domestic Supply Obligation (DSO) by supplying the much-needed gas to the project, after thorough negotiations supervised by the Federal Ministry of Petroleum Resources to enhance the local utilization of gas for national development as envisaged in the National Gas Policy.

This project further underscores the resolve of the Federal Government through the Ministry of Petroleum Resources to encourage private sector participation in the Oil and Gas sector and creation of jobs which are two of the key initiatives the Honorable Minister of State has been championing in the sector for the past 2 years.

The Greenville Mini-LNG plant has an installed production capacity of 2,250mt/day and is powered by 50mw gas-fired captive plant among other ancillary infrastructure. In order to facilitate delivery, Greenville has purchased LNG transportation trucks and tankers and is constructing retail stations and secondary storage facilities across the nations for logistics support.

This GSAA has the capacity to create up to 2,000 direct jobs (and 5,000 indirect jobs); provide an avenue for seamless movement of gas to stranded locations across the country; facilitate the use of gas for power generation; revive gas-based industries, and supply gas to large industrial ventures and transportation.

The project will significantly contribute towards the displacement of more harmful and expensive fuel sources; conserve much needed foreign exchange. The improved economic activity also increases the Federal Governments revenue base and supports the Administration’s revenue diversification agenda.

The execution of the GSAA brings an end to negotiations on the supply of gas to this pioneering project. The plant is ready to commence operations before the end of the year, giving Greenville the ability to meet the energy requirements of Nigerian business at this critical stage of the nation’s development.

Plans are already underway to expand plant capacity to 5,250mt/day, as we believe strongly in the development of gas as an integral part of the renewed industrialization of Nigeria, said Chairman of Greenville Oil and Gas Company Limited, Mr. Eddy Van Den Broeke.

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