The Nigerian National Petroleum Corporation and its partner, Sterling Oil Exploration and Production Company, on Thursday signed the gas development agreement for the execution of the Oil Mining Lease 143.
In a statement issued in Abuja by the spokesperson of NNPC, Kennie Obateru, the corporation said the agreement would boost its gas development and commercialisation programme.
It said the project would also boost the nation’s gas production by 1.2 trillion cubic feet.
Speaking at the signing ceremony, NNPC’s Group Managing Director, Mele Kyari, said the gas commercialisation strategy was in line with the Federal Government’s National Gas Expansion Programme.
He said the gas from the project would be processed at the Ashtavinayak Hydrocarbon Limited 125 million standard cubic feet of gas per day gas plant located in Kwale, Delta State.
Kyari was quoted as saying, “This opens a gateway for other opportunities in the oil and gas industry, not just SEEPCO Group but for other companies too.
“We are happy that this will unlock significant volumes of gas which will deliver 125mmscfd to the midstream plant that you have built. Of course, this is a great milestone for us and we are happy to do business with you.”
He said the development of OML 143 would bring value for the Federal Government, NNPC and SEEPCO Group, which would in turn boost the nation’s economy.
On his part, the Group Managing Director of SEEPCO, Tony Chukwueke, said the OML 143 agreement was a major milestone for the country because it was the first agreement in Nigeria that fully separated gas development from oil production.
He said the arrangement would enable holistic development of the gas potential in the block, adding that the agreement was a significant step.
Chukwueke said it was the first of its kind to expressly include terms that encouraged the contractor to be effective in its cost management thereby passing on significant revenue to the Federal Government, NNPC and other stakeholders.
The gas development agreement is required, pursuant to the Production Sharing Contract obligations, to set out the terms for the development of the 1.2tcf non-associated gas oil block by SEEPCO which is the contractor, while the NNPC is the concessionaire.
NNPC said the additional gas supply from the project would raise the nation’s gas production profile, make dry gas available for the proposed 650 megawatts NNPC/SEEPCO Independent Power Plant.
It said the agreement would boost in-country supply of Liquefied Petroleum Gas and general domestic gas utilisation, increase energy security and create job opportunities.
