The federal government has signed a memorandum of understanding (MoU) with Equatorial Guinea to supply gas from Nigerian offshore fields to the Equatorial Guinea gas processing facility at Punta Europa.
Last week, the federal government said it would invest and focus on natural gas exploration to achieve accelerated growth in the industry.
Timipre Sylva, minister of petroleum resources, signed the agreement on behalf of the federal government on Tuesday at the MoU signing ceremony in Abuja.
He said the agreement had kicked off a strategic collaboration across the Gulf of Guinea.
He added that Nigeria’s abundant natural gas reserves would complement Equatorial Guinea’s gas processing and liquefaction infrastructure.
Sylva explained that the recent passage of the Petroleum Industry Act (PIA) coupled with Nigeria’s Decade of Gas initiative triggered the project, as it had facilitated investment inflow from Equatorial Guinea into Nigeria.
He said the project also signalled the joint effort of the two countries in working towards a greener energy world.
“The execution of this MOU meets one of the imperatives of the Decade of Gas in Nigeria. While we are focused on the domestic gas agenda, we are keeping an eye on the global gas market as well,” the minister said.
“Nigeria has huge gas resources, a significant amount of which is offshore and will require unprecedented investment in infrastructure to bring them to market.
“This collaboration allows much of that stranded gas 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.”
Sylva further said the project, which envisioned an offshore gas pipeline development, would also create huge in-country local content opportunities for pipeline and other infrastructure service providers.
“This is in addition to accelerated royalty revenues that come from producing many gas fields that would have otherwise remained stranded.”
On his part, Gabriel Lima, minister of mines and hydrocarbons for Equatorial Guinea, said the execution of the MoU was a great example of the South-South cooperation between neighbouring Nigeria and Equatorial Guinea.
“As the global geopolitics of natural gas evolves and within the context of the world transitioning to a lower carbon footprint, it is imperative that we think differently on how to remain an important player in energy markets.
“New, fast, and competitive sources will be a major determinant of success.
“This strategic collaboration breaks down geographical boundaries and allows 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.”