French energy giant TotalEnergies is set to inject $750 million (N1.25 trillion) into Nigeria’s gas industry, aiming to bolster the country’s liquefied natural gas (LNG) output.
This ambitious project, known as the Ima dry gas project, is expected to receive final approval in 2025. It is a significant follow-up to TotalEnergies’ recent $500 million investment in the Ubeta onshore gas field, a venture with the Nigerian National Petroleum Company Limited (NNPCL).
Mike Sangster, TotalEnergies’ senior vice-president for Africa, exploration, and production, announced the project at a France-Nigeria business forum in Paris.
“We hope to sanction the Ima project next year for about $750 million,” Sangster revealed, emphasizing the company’s long-term commitment to Nigeria’s energy sector.
Tinubu’s Energy Reforms Pave Way for Investments
President Bola Tinubu’s administration has taken bold steps to revitalize Nigeria’s oil and gas sector since May 2023.
Through two executive orders, Tinubu aimed to streamline processes and attract investments, a move that industry players, including TotalEnergies, have welcomed.
“There is still more to be done in terms of regulation,” Sangster noted. “But we appreciate the changes made over the past year, which have motivated us to renew our investments in Nigeria.”
Tinubu’s government is also targeting $10 billion in deep-water gas exploration by offering tax incentives and policy adjustments to attract global players.
Local Content Rules Under Scrutiny
While praising Nigeria’s regulatory improvements, Sangster called for more flexibility in local content requirements, particularly in deep-water projects.
He argued that easing these rules would encourage international contractors to participate and boost Nigeria’s competitiveness in the global energy market.
Ubeta Project to Begin Production in 2027
TotalEnergies’ $500 million Ubeta project, which is part of the broader strategy to increase LNG production, is already in motion.
Located within the OML 58 onshore licence, the Ubeta field will feature a cluster of six new wells connected to existing infrastructure via an 11-kilometer pipeline.
Production is expected to commence in 2027, with a capacity of 300 million cubic feet of gas per day, equivalent to 70,000 barrels of oil per day, including condensates.
The gas will be transported to the Nigeria LNG plant on Bonny Island, where TotalEnergies holds a 15% stake.
LNG Expansion Critical for Nigeria’s Economy
Nigeria’s LNG sector is vital for the country’s economy, contributing significantly to revenue and foreign exchange earnings.
However, the sector has faced challenges, including declining production and regulatory bottlenecks.
TotalEnergies’ renewed investments signal a positive shift and align with Nigeria’s broader goal of expanding LNG exports.
Industry Reactions
Experts and stakeholders have lauded the planned investment, highlighting its potential to create jobs, boost local content, and increase Nigeria’s gas production capacity.
“TotalEnergies’ commitment is a vote of confidence in Nigeria’s oil and gas sector,” an energy analyst said. “It also shows that the government’s reforms are beginning to yield results.”
Sangster’s call for regulatory flexibility, however, has sparked debate.
While some industry players agree that easing local content rules could attract more foreign investment, others argue that such a move might undermine efforts to develop local capacity.
TotalEnergies’ Long-Term Vision
TotalEnergies has a long history of operations in Nigeria and remains one of the country’s most significant foreign investors in the oil and gas sector.
The company’s latest investments reflect its long-term vision to enhance Nigeria’s energy landscape and support the country’s transition to cleaner energy sources.
“We are committed to stopping the decline and increasing production,” Sangster reiterated, emphasizing the company’s dedication to sustainable energy development in Nigeria.
