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A gas project that has sat on the drawing board for more than 30 years is back on the table. The Nigerian National Petroleum Company Limited (NNPC) has opened talks with the Ogun State government on reviving OgunLNG, a liquefied natural gas plant planned for the Ogun Waterside area on the state’s coast, with an initial investment of $10 billion in view. The discussions are at an early stage, and no final investment decision has been announced, but the renewed interest has put one of Nigeria’s longest-delayed energy ventures back in the spotlight.
Governor Dapo Abiodun disclosed the development at an event in Iperu, in Ikenne Local Government Area, according to coverage by Leadership and other Nigerian outlets. He said an NNPC team had begun talks with the state on the practical conditions for the plant to take off, including land requirements, incentives and related arrangements. “Now they have brought the project back to life,” he said, as quoted in published reports. The governor added that the state would provide cooperation and the guarantees required.
The project is better known by an older name. Olokola LNG was conceived as a joint venture of NNPC, Shell, Chevron and BG Group, and it never reached a final investment decision, according to a summary by Oil & Gas Middle East. A meeting in Abeokuta on September 30 opened the latest round of talks, and NNPC said it is reviewing the challenges that stalled the project in the past with the aim of finding lasting solutions. The company also set out the site it would need: roughly 1,728 hectares of land and up to three jetties. Abiodun said NNPC would pay for land inside the planned economic zone.
The timing is no accident. The talks came about a week after Ogun State signed memoranda of understanding with the ports and logistics group DP World in Paris on September 24. Those agreements cover the Gateway Deep Sea Port and a 10,000-hectare Ogun State Blue Marine Special Economic Zone, with an initial investment of more than $7 billion and a projected 50,000 direct jobs, based on figures given by the state government. State officials are presenting the port, the economic zone and the possible LNG plant as one connected maritime, energy and industrial cluster. “Last Wednesday, we signed an MoU on the Deep Sea Port, and today we have the NNPC team here,” Abiodun said, according to a state-linked commentary published in Premium Times.
It is worth separating what has been agreed from what has been floated. The $7 billion port and zone figure comes from signed memoranda, which are statements of intent rather than binding construction contracts. The $10 billion LNG figure is described in reports as the initial investment NNPC is set to commit to OgunLNG, though some state-linked commentary groups the port and LNG plans under a combined $10 billion headline, which creates some confusion about how the numbers fit together. Reports reviewed for this article do not give a plant capacity, the number of liquefaction trains, a list of equity partners, a financing structure or a construction timetable. Those details will determine whether the project moves from talk to steel.
The governor pointed to NNPC’s existing facility in Bonny, Rivers State, as a guide to what the plant could mean for jobs. He said about 14,000 people are employed there, a figure that comes from his own remarks and was not independently verified. He also said the project would have multiplier effects, from employment to gas supply for industries inside the economic zone, across Ogun State and in the wider South-West. NNPC’s Executive Vice President for Gas, Power and New Energy, identified in reports as Mr. Ogunleye, congratulated the people of Ogun State and said the project could significantly change the area’s economic fortunes. ThisDay also reported that an official quoted the President as calling the venture a model of cooperation between federal and state governments, with Ogun supplying land and an investment structure while private capital and international expertise drive delivery.
For Nigeria, the logic of an LNG plant on the western coast is not hard to see. The country already exports LNG through Nigeria LNG at Bonny Island, a company in which NNPC holds 49 percent alongside Shell, TotalEnergies and Eni. That project took years to build out to six trains at a total reported cost of about $9.3 billion, which gives a sense of the scale a new plant could demand. Nigeria also holds large gas reserves that have long been underused, and policy makers have promoted gas as a transition fuel that can power industry and reduce reliance on imported liquid fuels.
The global backdrop may also help. Recent coverage of fuel markets has pointed to supply disruption linked to the war involving Iran and the closure of the Strait of Hormuz, which has changed how buyers think about security of supply. Producers outside the Gulf have a stronger commercial case in that environment, though that is my reading of the market rather than a statement from NNPC or Ogun State, and LNG projects are planned over many years, so today’s conditions may not last through construction.
The obstacles are just as real as the opportunity. Olokola LNG stalled in the past for reasons that include partner exits, financing hurdles and changing market conditions, according to project histories. A new plant needs a reliable supply of feed gas, which means pipelines and upstream development, long-term buyers willing to sign offtake contracts, and lenders prepared to finance billions of dollars. The state’s assurance of guarantees will need to be spelled out, since sovereign or state-level support can raise questions about contingent liabilities. Environmental and community consultation in a coastal area will also matter, and the large land requirement means the state will need to manage acquisition and compensation carefully.
There is also a design question that the public statements leave open. LNG plants are generally built to supply export markets, because converting gas to liquid is expensive and only makes sense when the product is shipped across oceans. The governor spoke of supplying gas to industries in the economic zone and the South-West, which would normally require a separate domestic gas arrangement. How the project balances export revenue with local supply is something investors and the public will want to see in the detailed plans.
What happens next is fairly clear. The next milestones will be formal agreements on land and incentives, the appointment of technical and commercial partners, and a decision on whether the project is developed as an NNPC-led venture or with international oil companies and financiers. Anyone tracking the story should watch for a feasibility update, a financing announcement and any commitment on feed gas. Until those arrive, the right reading is that Nigeria’s state oil company and a coastal state government have restarted a conversation that stalled for decades, and that the $10 billion figure is a statement of ambition rather than money already spent.
Readers who follow Nigerian energy, infrastructure and business developments can find more coverage at BusinessTech Nigeria.
