Energy Transition - Oil & Gas - March 1, 2022

Nigeria, Equatorial Guinea sign pact to jointly develop, monetize stranded gas reserves

MEDIATRACNET

Nigeria on Tuesday signed a landmark agreement with Equatorial Guinea that would allow natural gas from Nigeria’s offshore oil fields to be supplied to the neighbouring gas processing facility at Punta Europa, Equatorial Guinea.

The agreement is part of the Memorandum of Understanding (MOU) to kick off a strategic economic collaboration across the Gulf of Guinea on how to find the market for Nigeria’s abundant natural gas reserves.

The gas supply arrangement is expected to compliment Equatorial Guinea’s world class Gas Processing and Liquefaction infrastructure.

Minister of State for Petroleum Resources, Timipre Sylva, said during the agreement signing stated that the execution of the MOU satisfies one of the key imperatives of the “Decade of Gas” initiative in Nigeria.

Sylva said the recent passage of the Petroleum Industry Act coupled with the adoption of Nigeria’s Decade of Gas initiative created an enabling environment for major investment inflows from Equatorial Guinea into Nigeria.

The Equatorial Guinea’s gas processing and liquefaction project, Sylva said, also signals the joint effort by the two countries to work towards a greener energy world.

He said while Nigeria was focusing on its domestic gas development agenda, the country was also keeping an eye on the global gas market as well to identify investment opportunities.

“Nigeria has huge natural gas reserves, a significant amount of which are located offshore and will require unprecedented investments in infrastructure to bring them to the market. This collaboration with Equitorial Guinea will allow much of that stranded or undeveloped gas reserves to access the global gas market within 18 to 24 months in what will be the fastest timeline to market for a Nigerian offshore gas asset.

“This is possible because Equatorial Guinea brings to the table a major portfolio of world class gas processing and liquefaction infrastructure already in place in Punta Europa, coupled with investment funds for development.

“Additionally, the project, which envisions an offshore gas pipeline development, will also create huge in-country local content opportunities for pipeline and other infrastructure service providers. This is in addition to accelerated royalty revenues that will come from producing many gas fields that would have otherwise remained stranded,” Sylva said during the agreement signing ceremony.

The Minister of Mines and Hydrocarbons of Equatorial Guinea, Gabriel Nguema Obiang Lima, who executed the MOU on behalf of his country, said the pact was a great example of the South-South cooperation between neighbouring Nigeria and Equatorial Guinea.

Lima said as the global geopolitics of natural gas evolves and within the context of the world transitioning to a lower carbon footprint, it was imperative that the two countries thought differently on how to remain an important players in the energy markets.

He said new, fast, and competitive sources of energy would be a major determinant of success, adding that the strategic collaboration between Nigeria and his country would break down geographical boundaries and allow the delivery of gas from Nigeria to Equatorial Guinea’s Punta Europa facilities, extending their life and providing access to the regional and global energy markets.

The pact, he said, would give NNPC and its Joint venture partners a unique opportunity to monetize the gas that would have otherwise been stranded offshore due to the absence of infrastructure to develop it.

As the world dynamics change, Nigeria aims is to adapt rapidly to ensure that the country, as a leading producer of oil and gas in Africa remained at the forefront of credible gas exporters.

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