The Nigerian National Petroleum Company Limited (NNPC) has restarted discussions with investors to revive two major Liquefied Natural Gas (LNG) projects—Brass LNG and Olokola LNG—valued at a combined $29.8 billion.
This announcement was made by NNPC’s Chief Financial Officer, Umar Ajiya, during the ongoing 2024 Gas Technology Conference and Exhibition (Gastech) in Houston, United States.
The Olokola project, located in Ogun State, is valued at $9.8 billion, while the Brass LNG plant in Bayelsa State is estimated to cost $20 billion. These projects were designed to increase Nigeria’s gas output by over 22 million tonnes annually.
However, they have faced delays spanning nearly two decades due to unfavorable market conditions and political indecision.
“In the past, gas prices dropped, and the high capital expenditure (CAPEX) discouraged investors. There was also slow decision-making by the political class,” said Ajiya. Both LNG projects were initiated in the early 2000s under the administration of former President Olusegun Obasanjo to harness Nigeria’s vast natural gas reserves and meet the growing demand for cleaner energy sources globally.
Brass LNG was incorporated in 2003, with NNPC holding a 49% equity stake, alongside international oil companies (IOCs) like Eni International, ConocoPhillips, and Total, each holding 17%. The project aimed to produce 10 million tonnes of LNG annually by 2011, but the withdrawal of major IOCs led to its abandonment.
Similarly, the Olokola LNG project, valued at $9.8 billion, was expected to produce 12.6 million tonnes per annum. However, shareholders like Shell, Chevron, and BG Group exited the project due to Nigeria’s perceived unfriendly business environment.
Despite past setbacks, NNPC remains optimistic. Ajiya emphasized that the company is now commercially driven, with a focus on swift project execution. He praised the 2021 Petroleum Industry Act (PIA) for offering fiscal incentives to attract investors, as well as President Bola Tinubu’s efforts to advance oil and gas reforms through executive orders.
Additionally, Dr. Philip Mshelbila, Managing Director of Nigeria LNG Limited, addressed the need for massive investments in infrastructure to drive energy transitions in developing nations during a global leadership panel at Gastech. He pointed to challenges such as inadequate pipelines, storage, and regasification facilities, and highlighted the importance of energy inclusion and equity for emerging economies like Nigeria.
As the NNPC re-engages investors, both the Brass and Olokola LNG projects are positioned to play a critical role in Nigeria’s energy future, aligning with global shifts towards cleaner energy and the nation’s “Decade of Gas” initiative.
