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NNPC signs production pact with partner to boost gas output by 1.2 trln cubic feet

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The Nigerian National Petroleum Corporation (NNPC) said it plans to boost the country’s gas production capacity with 1.2 trillion cubic feet with the signing of a gas development agreement with a production partner.

According to a statement by the corporation, the NNPC on Thursday signed a production agreement with Sterling Oil Exploration and Production Company for the execution of the Oil Mining Lease (OML) 143.

The agreement would boost its gas development and commercialisation programme, said NNPC spokesperson, Kennie Obateru.

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.

“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,” Kyari was quoted as saying.

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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.

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.

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