TotalEnergies plans $750M offshore Nigeria gas project to boost LNG supply

(Bloomberg) – TotalEnergies may greenlight a $750 million gas project in Nigeria next year, potentially signaling that the African nation’s efforts to revive investment in its hydrocarbon production are making progress.

Earlier this year, the French company approved an investment of about $500 million in a joint venture with state-owned Nigerian National Petroleum Co. to develop the Ubeta onshore field. That project with output of 300 million cubic feet per day will boost supply to the Nigerian Liquefied Natural Gas plant.

“We have another dry gas project called Ima which we hope to sanction next year for about $750 million,” Mike Sangster, senior vice president Africa, exploration and production at TotalEnergies, said at a France-Nigeria business forum in Paris Friday. The shallow-water project, developed with a local partner, would further boost supply to the LNG facility.  

Since coming to office in May 2023, President Bola Tinubu has worked to address challenges in the oil and gas sector, signing two executive orders this year to boost efficiency. Nigeria hopes to attract as much as $10 billion of new investment in deep-water gas exploration through tax breaks and other measures proposed in a new policy framework.

“There’s still more to be done in terms of regulation, simplifying, accelerating the process, but we have appreciated some of the changes that have been made over the past year,” TotalEnergies’s Sangster said. They “have given us now the incentive or the motivation to go ahead and renew our investments in Nigeria so that we can stop the decline and start to increase production.”

He called for further relaxation in local content rules to encourage international contractors specialized in deep-water projects to return to Nigeria, which would in turn stimulate competition and unlock some investments that have been put on hold.