NNPC may turn to capital market to fund new projects

July 4th, 2018

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, says the corporation may approach the Capital market to raise funds for its new projects.

The projects include the NNPC/NAOC JV Idu-Re-development, South Gas Project, North Gas Project and Central Gas Project.

Baru, made this disclosure at the ongoing Nigeria Oil and Gas Strategic Conference and Exhibition (2018 NOG) in Abuja.

With the theme: “Driving Nigeria’s Oil and Gas Industry Towards Sustained Economic Development and Growth”, Dr. Baru explained that funds from the Capital market would also be used to develop the NNPC/TEPNG JV’s Ikike Project, NNPC/SPDC JV Southern Swamp and Associated Gas Solution Step 2 Project, among others.

“We intend to sanction the Multibillion US Dollars Bonga South West/Aparo (BSWA) project as soon as we conclude an agreement on the Heads of Terms with SNEPCO on the various pending PSC Arbitration disputes. This will jump start the resolution of all the other PSC Arbitration Disputes,” Dr. Baru informed.

Baru said the current daily domestic gas demand had attained an unprecedented level of 4,000 million standard cubic feet of gas per day which is still expected to grow exponentially to about7,500mmscfd in the next five years.

He stated that within next three years, NNPC, in collaboration with its Joint Venture partners, was committed to increasing natural gas availability from 1.5bscf/d to about 5billion standard cubic feet per day in 2020 to generate up to 15GW of electricity as well as stimulate gas-based industrialization.

posited that the Corporation would continue to progress with its Seven (7) Critical Gas Development Projects (7CGDP) which has also been established to deliver about 3.5bscfd of gas to the domestic market by 2020.

He reiterated that the NNPC had sanctioned the $2.8 billion 614Km Ajaokuta-Kaduna-Kano (AKK) pipeline project as a demonstration of its commitment to developing structured gas architecture across the length and breadth of Nigeria as part of NNPC’s priority in the medium to long term.

In the Midstream, Dr. Baru submitted that there were ongoing discussions to revamp the four local refineries by utilising private capital in form of Contractor-Financing model, adding that this represents a shift in NNPC’s investment model, redefining the commercial framework for midstream investment in Nigeria.

“Within the new model, investors would be repaid from incremental production of the refineries on prior agreed terms”, Dr. Baru explained.

Dr. Baru said the NNPC believed that the downstream sector holds the future, saying that the plan to become a net exporter of refined products by year-end 2019 is on course.

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