NNPC in Talks With Investors for Revival of $30bn Brass, Olokola LNG Projects
Peter Uzoho
The Nigerian National Petroleum Company Limited (NNPCL) has resumed discussions with investors towards bringing back to development two long-abandoned Liquefied Natural Gas (LNG) projects — Brass and Olokola LNG projects — with a total cost of $29.8 billion.
The Chief Financial Officer (CFO) of NNPCL, Mr. Umar Ajiya, disclosed this at the ongoing 2024 Gas Technology Conference and Exhibition (Gastech) in Houston, United States.
The Olokola gas project sited in Ogun State, valued at $9.8 billion, and the Brass LNG plant in Bayelsa State, estimated at $20 billion are positioned among the largest gas infrastructure investments in Nigeria.
According to the NNPCL, both projects, which were anticipated to boost Nigeria’s gas capacity by over 22 million tonnes per annum, have faced decades of delays due to “unfavourable market dynamics and slow decision-making by the political class in the past”.
“In the past, gas prices went down, the economics of the projects meant a high Capital Expenditure (CAPEX), and this was a dis-incentive for investors and partners. Also, there was slow decision-making by the political class,” Ajiya stated.
The $20 billion Brass LNG project in Bayelsa State and the Olokola gas project were expected to create thousands of new jobs, spur domestic gas demand, boost electricity generation, and create opportunity to diversify Federal Government’s revenue generation.
The Brass project, which was initiated under the administration of President Olusegun Obasanjo, was also projected to help the country monetise part of its vast natural gas reserves and meet the growing worldwide demand for clean energy.
However, the project has been stalled by lack of Final Investment Decision (FID), as well as delays caused by unnecessary bickering and lack of political will.
While describing NNPCL as a commercially driven company, which recognises timely project development and execution, the CFO said there are abundant gas resources in many parts of the world and therefore, the earlier Nigeria makes smart decisions to bring partners to the table the better.
In addition, Ajiya commended President Bola Tinubu for his support in driving new projects in the industry through the Presidential Executive Orders on Oil & Gas Reforms.
“We are also happy to have the Petroleum Industry Act, 2021 (PIA) which has provided fiscal incentives for investors and is creating the enabling environment that has rekindled hope in the energy sector,” he said.
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