Oil majors Total SA, ENI SpA and ConocoPhillips signed an agreement with Nigeria’s state oil firm Wednesday solidifying a deal for a US$2 billion (�1.5 billion) natural gas plant in the country’s southern oil region, a senior official said.
Martin Hutchison, managing director of the project, said the shareholders agreement signed in Abuja will regulate the building and running of a liquefied natural gas plant at Brass in the Niger delta that will target North American and European markets along the Atlantic Ocean basin.
The group has reached purchase agreements with six buyers covering the entire production of the first two LNG-producing units to be constructed at the plant, Hutchison said.
Construction of the Brass LNG plant is expected to start in 2007.
Oil-rich Nigeria is believed to be even richer in natural gas, with proven reserves exceeding 170 trillion cubic feet, most of it barely exploited. More than 60 percent of the natural gas occurring with oil production in Nigeria is simply burned away for lack of investment in gas-gathering facilities.
Growing violence by militants in the main southern oil and gas region, fighting for local control of its wealth, has cast a shadow of insecurity on oil and gas investments there. Brass LNG plans to engage the communities in enlightenment campaigns and development initiatives to help promote understanding, Hutchison said.
Nigeria’s first major natural gas plant on Bonny Island in the southern Niger Delta � jointly owned by Royal Dutch/Shell Group of Cos., Total, ENI and the Nigerian state oil company � has grown from an initial investment of $3.8 billion (�3.01 billion) in 1999 to over $10 billion (�7.91 billion) after several expansions.