Nigeria signs deal with Afreximbank to fund $200m LNG project

Oct 19, 2023

By Udeme Akpan, Energy Editor in South Africa

NIGERIA and African Export Import Bank, Afreximbank, yesterday, signed an agreement targeted at funding the nation’s $200 million Liquefied Natural Gas, LNG project, located in Bayelsa State.

The agreement was signed at the ongoing African Energy Week, AEW, in Cape Town, South Africa by Afreximbank and the project promoters – AlphaDen Energy and Oilfield Limited – for the construction of a 20 million standard cubic feet per day gas processing facility.

Under the terms of the agreement, Afreximbank would provide 70 per cent of the fund, leaving 30 per cent for the project promoters.

The project will be built at the Obama flow station, situated in Oil Mining License, OML 63, and will have the capacity to produce 405 million tons per day of LNG and 294 barrels per day of crude condensate.

Speaking at the event, Executive Chairman, AlphaDen Energy, Pascal Anyanwu, said the pioneering project is based on of the Federal Government moves to commercialize or monetize huge gas reserves for use in industries, homes and the transport sector.

He stated: “We have been encouraged by the Nigerian Content Development and Monitoring Board, NCDMB, to execute this important project. We are one of the 100 companies being encouraged by the Board to grow. We believe that every little step that we take will help make contributions towards the energy independence of this continent.

“This event marks a significant day in this journey, and hopefully there will be more that will follow in these footsteps as we follow those before us.”

Similarly, the Executive Secretary, NCDMB, Engr. Simbi Wabote, said: “We have been supporting 100 companies to grow as part of our strategic plan to take them to greater heights.”

On his part, the Executive Chairman, African Energy Chamber, NJ Ayuk, said: “Indeed, this is a great moment for Nigeria and Africa. It would go a long way to harnessing huge gas for development.

“We all believe that gas is going to play a leading role in how we develop Africa’s energy security. This is going to be a 45 billion Naira ($60 million) energy facility that will be developed by an African company. On behalf of the African Energy Chamber and Afreximbank, we salute you.”

Also speaking, the Director, Client Relations, Afreximbank, Rene Awambeng, said: “We are committed to funding projects. This is just the beginning. There is still a long way to go and we are committed to gas development.”

The facility will be repaid from the sale of condensate gas, which has been secured by six offtakers and will be transported using 20-ton ISO tanks to customers throughout Nigeria’s six geopolitical regions.

The Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Engr.

Gbenga Komlafe, had noted that, “The Federal Government of Nigeria (FGN) remain committed to its policy position that gas flaring is unacceptable and the FGN has continued to support several initiatives and actions to reaffirm its commitment to ending the practice of gas flaring in our oil fields.

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