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COP28: NNPC signs two LNG deals for domestic, international markets

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The Nigerian National Petroleum Company Limited (NNPCL) has sealed two major agreements to deliver Liquefied Natural Gas (LNG) to the domestic gas market and the international LNG market.

This is part of its efforts to further boost natural gas utilisation in the country, thereby reducting methane emissions and enhancing Nigeria’s gas revenue.

During two separate signing ceremonies held on the sidelines of the ongoing COP28 in Dubai, NNPC Ltd signed an MoU with Wison Heavy Industry Co. Ltd, a Chinese company, for the development of floating LNG project in Nigeria, targeting the international LNG market.

Also, NNPC Prime LNG Ltd, an arm of NNPC Trading Ltd, signed a Supply, Installation and Commissioning Agreement with SDP Services, an independent oil and gas company, for a 421 tonnes per day LNG project targeting the domestic LNG market.

The Floating LNG MoU was signed by the Executive Vice President, Gas, Power & New Energy, Olalekan Ogunbayo, on behalf of NNPC Ltd and Mr. Kai Xu, Managing Director of Wison Ltd, on behalf of his company. Both parties agreed to work together to chart a roadmap for the project development that will lead to an investment decision.

Similarly, the Small-Scale LNG (SSLNG) Project agreement was signed by the Managing Director, NNPC Trading Ltd., Mr. Lawal Sade, on behalf of NNPC Prime LNG Ltd while Mr. Abhinav Modi, Managing Director of SDP Services Ltd, signed on behalf of his company.

The SSLNG Project, which will be located at Ajaokuta in Kogi State, Central Nigeria, will ensure the efficient supply of LNG to the Autogas/Compressed Natural Gas (CNG) and industrial/commercial customers nationwide. The LNG Project is expected to be operational by December 2024.

Speaking shortly after the signing ceremony, the EVP Gas, Power & New Energy, Mr. Olalekan Ogunleye, said NNPC Ltd is committed to delivering gas to industries nationwide and accelerating the Company’s gas commercialisation efforts through the floating LNG Project.

“We see both projects as having enormous impact all over the country because they are central to the commercialisation of Nigeria’s abundant gas resources and ensuring that our country earns the much-needed foreign revenue from its abundant gas assets. It is also consistent with NNPC Management’s drive to deliver on Mr. President’s gas and power aspirations across the country,” Ogunleye stated.

Also, in his address after the signing, the MD NNPC Trading Ltd, Mr. Lawal Sade, said the SSLNG Project would boost the domestication of LNG utilisation by supporting the growth of auto-gas initiatives across the country.

“We are looking at a time-frame of 12 months from execution to the commissioning of the project. The project will deliver about 420 tonnes per day of LNG per day into the domestic market, which will enhance efficient delivery of gas to the auto-gas/CNG and industrial customers in line with Presidential mandate,” Sade added.

While expressing their delight at signing the agreements, the partners pledged to work with NNPC Ltd to deliver the projects within schedule and in the most cost-effective manner.

In a related development, NNPC Ltd. has expressed its commitment to work with global partners in the march towards reducing methane emissions in oil and gas operations.

On the sidelines of COP28, the Oil and Gas Decarbonisation Charter was released.

The Charter calls on the oil and gas sector to achieve the goal of reaching net-zero emissions for their own operations by 2050. It also includes commitments to achieve near-zero methane emissions and no routine flaring by 2030.

Speaking on the development during a Panel Session titled “Accelerating the Elimination of Methane Emissions & the Decarbonisation of Oil & Gas,” NNPC Ltd’s Executive Vice President, Upstream, Oritsemeyiwa Eyesan, said the Charter was a major opportunity not just for the NNPC Ltd, but for the African sub-region.

“Africa contributes three percent to emissions, but that does not exclude us from the consequences of the emissions. I think the decarbonisation drive and the charter are not just ethical but also a strategic imperative for a major African National Oil Company (NOC) like ours.

“We believe this charter is an important one. We are committed to working with all stakeholders to deliver on that,” Eyesan stated.

She said that, to achieve its near-zero methane emissions, Nigeria has since declared this decade as Decade of Gas, which is not only geared towards producing more gas for export, but also towards producing gas for local economy and that of the entire African sub-region.

“I assure you that we are open to working with our partners towards achieving zero-flare and methane emission reduction by 2030. This fits perfectly with our dreams, and we consider it achievable,” Eyesan said.

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