Financial Energy Review
President Mohamadu Buhari has approved the Nigeria National Petroleum Corporation (NNPC), Black Rhino and Akwa Ibom State government new Oil and Gas Free Zone (OGFZ) with $10 billion worth of investment.
The new free zone, which is jointly promoted by the Akwa Ibom State Government, the NNPC and an American private equity investor, the Black Rhino Group, is said to have already reported investment commitments worth more than $10 billion with the potential to create more than 7,000 long-term jobs.
The free zone, named Liberty Oil and Gas Free Zone, which is the largest in West Africa, sits on a physical land space measuring more than 50,000 hectares spread across six local government areas of Ikot Abasi, Eastern Obolo, Oruk Anam, Mkpat Enin, Onna and Ibeno.
In a statement issued on the presidential declaration of the area as a free zone, the Minister of Industry Trade and Investment, Otunba Adeniyi Adebayo, who is the supervising minister for the nation’s free zones, described the project as “a game changer.” Otunba Adebayo said, “The Liberty Oil and Gas Free Zone is expected to generate industrial clusters that will deliver impetus to the Federal Government Industrial Revolution Plan by fast-tracking the development of related industries such as lubricant and plastics manufacturing, utilizing abundant hydrocarbon feedstocks in the zone.”
The Managing Director of the Oil and Gas Free Zones Authority (OGFZA), Mr Umana Okon Umana, said OGFZA was “excited about the project because of the prospects it holds out for the economic development of the country.” OGFZA is the statutory regulator of the new free zone.
One of the promoters/developers operating out of the Ibeno axis of the free zone, Qua Iboe Export Hub Limited (QIEH), has a significant operation in place already, gearing up as the gas processing hub for West Africa.
A profile of QIEH’s planned investments and projects up to 2023 include a 567MW gas-fired power plant, which is at advanced stages of development; 15 million standard cubic feet gas flare elimination investment valued at $120 million under the Federal Government gas flare commercialization programme, by which gas being flared around the area will be gathered and converted to domestic use; a 3.5 million MTPA petrochemicals platform, designed under the nation’s natural gas monetization programme to produce methanol and ammonia; and a 2.0 million MTPA liquefied natural gas plant, LNG export terminal and LNG fleet network to be developed within the projected period.
Other key projects lined up for execution during the period include a gas field development and pipeline transport system to supply gas from Mobil-NNPC JV operations to meet the energy requirements of QIEH; a high-octane gasoline 20,000 bpd plant for the production of synthetic gasoline; and the development of a logistics base and a fabrication yard to support the operations of oil production and service companies in the zone.
When the entire free zone comes on stream, it will position the country as the destination for future downstream investments in the oil and gas industry, especially in logistics and manufacturing. The development design of the zone at full rollout will feature a Petroleum and Energy District; NNPC Logistics Centre; Business and Industrial District; Agro-allied Industrial District; and Heavy Industry District.
The Liberty Oil and Gas Free Zone inherited some important legacy projects, which include the 115 MW Ibom Power Plant and the Aluminium Smelting Company of Nigeria, both of which are located in Ikot Abasi.
