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Nigeria’s offshore gas revival

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New offshore drilling and deepwater development projects are driving Nigeria’s oil and gas industry. Image credit: Wikimedia

Nigeria’s offshore gas revival

New offshore drilling and deepwater development projects are driving Nigeria’s oil and gas industry.

Sitting on an estimated 203 trillion cubic feet of natural gas, Nigeria is on a mission to monetise its gas resources and become a leading Liquefied Natural Gas (LNG) exporter to global markets.

The USD5-billion Nigeria LNG Train 7 expansion is set to boost processing capacity by 35% from 22 million tonnes to 30 million tonnes per year.

This means higher gas volumes to export to gas-hungry markets like Europe. In 2023 Nigeria exported more than 9.4 billion cubic meters of LNG to the European market.

However, to accelerate exports, the country requires substantial investment in deepwater gas projects and infrastructure development.

The upcoming Invest in African Energy 2024  forum (taking place in Paris on May 14-15) will showcase Nigerian and African investment opportunities in deepwater exploration, gas monetisation and midstream infrastructure, as the continent enters a new phase of development.

Majors answer the call

Nigeria has issued a call for upstream investment, with a strong focus on deep offshore and a 2024 licensing round is on the cards to attract new explorers.

Supermajor Shell answered the call last week, announcing plans to deepen its investments in deepwater and invest USD1-billion over the next decade to develop Nigeria’s gas supplies.

Its primary 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 planned to come onstream in the short-, medium- and long-term.

More projects in the pipeline

Earlier this month, TotalEnergies started production at the Akpo West field offshore Nigeria, adding 14,000 barrels of condensate production per day, to be followed by an additional 4 million cubic meters of gas per day by 2028.

Chevron is also scaling up investments in Nigeria’s deepwater space, with upcoming plans to conduct seismic data acquisition in several deepwater blocks and expand its Agbami field project.

The American multinational also acquired a stake in offshore OPL 215 – joining TotalEnergies on the block – and renewed three of its deepwater licenses for a period of 20 years.

As International Oil Companies (IOCs) double down on new exploration and development activities, this opens opportunities for offshore drilling contractors, service providers and national companies to play an active role in Nigeria’s deepwater revival.

Sufficient gas infrastructure needed

Nigeria is also utilising gas monetisation as a means of eliminating gas flaring, having flared around 275 million cubic feet per day in 2023.

The gas flared in Nigeria has the potential to generate 1.125 GW of power for the country, representing substantial opportunities in gas-to-power infrastructure.

Meanwhile, the Nigerian Upstream Petroleum Regulatory Commission awarded 48 flaring gas sites for commercialisation, as part of efforts to expand the domestic gas market and decarbonise upstream activities.

Fast tracking pipelines

Nigeria’s gas production – expected to reach 12.2 billion cubic feet per day by 2030 – is also being driven by major pipeline projects, including the Nigeria-Morocco pipeline and Ajaokuta-Kaduna-Kano (AKK) pipeline.

Capable of delivering 3 billion cubic feet per day, the Nigeria-Morocco pipeline spans 13 West African countries and represents the path to Nigeria accessing the European market.

The two countries met last month to fast-track development of the project, which is awaiting a final investment decision. Meanwhile, the AKK pipeline will transport up to 2 billion cubic feet of gas per day from southern to central Nigeria – with a focus on driving power generation, industrialisation and new job opportunities – and is expected to be completed by mid-2024.

Organized by Energy Capital & Power, IAE 2024 (https://apo-opa.co/3UMOOtQ) is an exclusive forum designed to facilitate investment between African energy markets and global investors. Taking place May 14-15, 2024 in Paris, the event offers delegates two days of intensive engagement with industry experts, project developers, investors and policymakers. For more information, please visit www.Invest-Africa-Energy.com.

Nigeria’s offshore gas revival

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Nigeria’s offshore gas revival

 

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