The Nigerian National Petroleum Corporation (NNPC) and Sterling Oil Exploration and Production Company (SEEPCO) have signed an agreement to unlock 1.2 trillion cubic feet of gas from Oil Mining Lease (OML) 143.

The Group Managing Director (GMD) of NNPC, Mallam Mele Kyari said the Gas Development Agreement (GDA) is in sync with the Federal Government’s National Gas Expansion Programme (NGEP). According to him, the resource from the project would be processed at the Ashtavinayak Hydrocarbon Limited’s (AHL) 125 million standard cubic feet (mmscf) of gas per day gas plant located in Kwale, Delta State.

Group Managing Director (GMD) of NNPC, Mallam Mele Kyari

“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 would unlock significant volumes of gas, which would 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. You are a very reliable partner because when you say things, you get them done,” Kyari said.

The GMD of NNPC said the development of OML 143 would bring value for the Federal Government, NNPC and SEEPCO Group that would in turn boost the nation’s economy.

On his part, the Group Managing Director of SEEPCO, Tony Chukwueke, said the pact was a milestone for the country, because it was the “first agreement in Nigeria that fully separates gas development from oil production.” He explained that the arrangement would promote holistic development of the gas potential in the block.

According to him, the GDA was a significant step, as it was the first of its kind to expressly include terms that “encourage the contractor to be effective in its cost management, thereby passing on significant revenue to the Federal Government, NNPC and other stakeholders.”

The deal is required, pursuant to the Production Sharing Contract (PSC) obligations, to set out the terms for the development of the 1.2tcf non-associated gas oil block by SEEPCO, which is the contractor with the NNPC as the concessionaire.

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, boost in-country supply of Liquefied Petroleum Gas (LPG) and general domestic gas utilization, increase energy security, as well as well create job opportunities for Nigerians.

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