The $550 million Ubeta Upstream Gas Project, a collaboration between NNPC Ltd. and TotalEnergies, has officially commenced, marking a significant milestone in Nigeria’s energy sector.
Announced by the Presidency on Tuesday, the project aims to enhance Nigeria’s gas production and strengthen its energy security, with an expected output of 350 million standard cubic feet of gas per day when fully operational.
Olu Verheijen, Special Adviser to the President on Energy, revealed this development during the inaugural US-Nigeria Strategic Energy Dialogue, hosted by the U.S. State Department in Washington, DC. Verheijen explained that President Bola Ahmed Tinubu’s energy reforms, introduced in June 2023, have created a favorable investment climate, attracting global energy giants and boosting confidence in Nigeria’s gas-to-power value chain.
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According to her, the reforms are focused on improving energy security, attracting investments, and deepening collaboration with key partners, including the U.S. government.
She added that the reforms introduced by President Bola Ahmed Tinubu have significantly improved the viability of the gas-to-power value chain in Nigeria. These include initiatives to enhance cash flows in electricity distribution through smart metering, the payment of outstanding debts owed to investors, and efforts to reduce carbon emissions from gas production.
The signing of the Final Investment Decision (FID) for the Ubeta Field Development Project took place in Abuja in June 2023. The Ubeta field, located northwest of Port Harcourt in Rivers State and discovered in 1964, holds tremendous promise for Nigeria’s energy landscape. Once fully operational, the field will deliver 350 million standard cubic feet per day (MMScf/day) of gas, along with 10,000 barrels per day of associated liquids.
This development is expected to significantly bolster gas supplies to Nigeria Liquefied Natural Gas (NLNG) Limited, addressing the recent decline in LNG production that has contributed to the rising cost of cooking gas in the country.
The Ubeta field, located in Oil Mining Lease (OML) 58, will include a new 6-well cluster connected to existing facilities at Obite via an 11km buried pipeline. Production is expected to commence by 2027, with peak output projected at 300 million cubic feet per day, equivalent to about 70,000 barrels of oil equivalent per day, including condensates. Gas from the project will be directed to the NLNG plant on Bonny Island, which is currently expanding its capacity from 22 to 30 million tonnes per annum (Mtpa).
In addition to addressing Nigeria’s gas shortages, the Ubeta project has been designed with a focus on sustainability. The project will leverage existing gas processing infrastructure to minimize costs and emissions. Additionally, a 5 MW solar plant is under construction at the Obite site, and the drilling rig will be electrified to reduce its carbon footprint.
TotalEnergies has also committed to maximizing local content, ensuring that over 90% of manhours on the project will be worked by Nigerian personnel.
Verheijen also highlighted that President Tinubu has signed five new executive orders aimed at supporting energy sector reforms, unlocking up to $2.5 billion in new oil and gas investments in the country. These executive orders are designed to provide fiscal incentives for investment and streamline the process of finalizing and implementing contracts to develop and expand gas infrastructure.
Speaking at the same event, U.S. Assistant Secretary of the State Department’s Bureau of Energy Resources, Geoffrey Pyatt, emphasized the importance of the US-Nigeria energy partnership. He noted that the dialogue was a crucial step in advancing shared goals of energy security, decarbonization, and economic growth between the two nations.
“The inaugural U.S.-Nigeria Strategic Energy Dialogue has set the stage for strengthened energy collaboration between the United States and Nigeria,” Pyatt said. “Together, we’re advancing shared energy security, decarbonization, and economic growth goals.”
Nigeria’s delegation to the dialogue was led by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, and included representatives from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Nigerian Content Development and Monitoring Board (NCDMB), and NNPC Limited.
The U.S. delegation featured officials from the Bureau of African Affairs, USAID, the U.S. Department of Energy, the U.S. Trade and Development Agency, and the Export-Import Bank, signaling the broad scope of the dialogue.
In June, the NNPC-TotalEnergies joint venture announced a substantial $550 million Final Investment Decision (FID) for the Ubeta Field Development Project. This decision came in direct response to President Tinubu’s Presidential Executive Order on Oil & Gas Reforms, which aims to enhance the investment climate and establish Nigeria as a top destination for oil and gas investments in Africa.
Ekperikpe Ekpo, who also spoke during the dialogue, reiterated the importance of this project in shaping the future of Nigeria’s energy sector. He noted that the Ubeta gas project is not only a key contributor to the country’s gas production but also plays a significant role in the broader strategy of economic development and environmental sustainability.
This development is also expected to play a vital role in mitigating Nigeria’s energy crisis. In recent years, gas supplies to the NLNG plant have been inconsistent, leading to fluctuations in production and rising energy costs. The Ubeta project, with its substantial gas output, will stabilize supplies to the NLNG facility, which is in the process of expanding its capacity from 22 million tonnes per annum (Mtpa) to 30 Mtpa.
According to TotalEnergies, the Ubeta project is designed to be both low-cost and low-emission, with a focus on leveraging existing infrastructure. The company’s commitment to environmental sustainability is evident in the planned installation of a 5 MW solar plant at the Obite site, as well as the electrification of the drilling rig to reduce carbon emissions.