Nigeria Reopens Talks on Long-Delayed Olokola LNG Project

Nigeria is taking another look at the long-delayed Olokola LNG (OKLNG) project, with NNPC Ltd reopening discussions on the proposed gas export terminal and its place within a wider industrial development in Ogun State.

The project dates back to 2005 but never reached a final investment decision. Chevron, BG Group and Shell eventually withdrew in 2013, leaving the development stalled for more than a decade.

The latest discussions are centred on Ogun Waterside, where the state government is also pursuing plans for an industrial hub and deep-sea port.

OKLNG Tied to Ogun Waterside Development

Ogun State Governor Dapo Abiodun disclosed the renewed talks after meeting NNPC executives on September 30.

The discussions include the land and incentives needed for the LNG project. Abiodun said NNPC would pay for the land required within the economic zone, while the state would provide “all the assistance and guarantees” needed to support the development.

The LNG project is also being linked to Ogun Waterside's planned deep sea port. On September 24, Ogun State signed memoranda of understanding with UAE-based DP World for the port's development.

Nigeria's presidency subsequently identified OKLNG among the strategic infrastructure projects expected to support the port and the surrounding special economic zone.

The scale of the proposed LNG development is significant. Lekan Ogunleye, NNPC's Executive Vice President for Gas, Power and New Energy, said the project would require 1,728 hectares of land and 2.5 kilometres of Atlantic coastline. The site could accommodate up to three jetties for LNG loading.

A Project That Has Struggled to Move Forward

NNPC Chief Financial Officer Adedapo Segun said the company is examining why the project failed to progress.

The original development involved Chevron, BG Group and Shell, but the companies eventually pulled out. Chevron confirmed its exit in August 2013 after eight years without reaching a final investment decision, followed by the departure of BG Group and Shell.

This is not the first attempt to bring OKLNG back. In July 2021, Abiodun said Ogun State would work with NNPC on restarting the project.

The latest effort comes with several important details still unresolved. NNPC has not announced which gas fields would supply the terminal, who its new project partners would be, how the development would be financed or how much LNG the facility would produce.

There is also no implementation timetable yet.

Gas Supply Could Shape the Project

Local media reported on October 3 that NNPC could initially invest $10 billion in OKLNG, although the company has not publicly disclosed a full financing structure.

Gas availability will also be an important consideration as Nigeria looks to expand its LNG export capacity.

NNPC owns a 49% stake in Nigeria LNG, which operates the Bonny Island LNG plant. In early August, Nigeria LNG Managing Director Adeleye Falade warned that Nigeria's share of the global LNG market could decline from about 5% to 2% if the country does not secure more gas supply and expand its processing capacity.

That leaves NNPC facing a key question as it revisits Olokola: how to secure enough gas to support another major LNG export project while existing facilities are already dealing with supply constraints.