Bayelsa announces US gas plant deal, but investment value remains uncertain

Officials of Bayelsa State Govt with Fulcrum LNG team

The Bayelsa State Government has announced a partnership with a United States-based energy company to develop a gas processing facility, but the value of the proposed investment is yet to be determined, pending a feasibility assessment of gas flare sites across the state.

The government said the agreement with Fulcrum LNG Incorporated was reached on Wednesday at the inaugural US-Nigeria Governors Government-to-Business (G2B) Forum on Energy, Mining and Infrastructure in Sugar Land, Texas.

The announcement came after a meeting between Governor Douye Diri and the company’s Chief Executive Officer, Jesus Bronchalo.

According to a statement issued by the governor’s spokesperson, Daniel Alabrah, the project will be implemented in phases, beginning with the gathering and commercialisation of gas currently being flared.

The gas is expected to supply Bayelsa’s Independent Power Plant and emerging industrial clusters, while reducing environmental pollution associated with gas flaring.

A subsequent phase will involve an integrated gas monetisation and development plan to harness the state’s gas reserves.

However, the financial commitment to the Bayelsa project remains unclear.

Although the government publicised the deal as a $100 million investment, Mr Bronchalo said the actual investment requirement would only be determined after a comprehensive field study of the state’s flare sites.

He said the assessment would determine the locations of the facilities, the volume of gas being flared and whether the problem resulted from inadequate infrastructure to transport the gas or insufficient reinjection capacity.

Mr Bronchalo also cautioned that some flare sites could be too remote or economically unviable for gas gathering.

He said the company would finance the project entirely, although the state government would have to contribute capital if it wanted an equity stake.

The company’s chief executive said the period from the final investment decision to commissioning would be about 12 months.

He cited a similar project the company is undertaking in Guyana, which he valued at about $3 billion, as an indication of its experience in gas infrastructure development.

Fulcrum LNG was selected by the Guyanese government in June 2024 to help develop gas infrastructure for the monetisation of the country’s natural gas resources. The selection followed a competitive process involving 17 bidders.

The Guyana project was intended to involve the design, financing, construction and operation of gas infrastructure, although its development has faced questions about financing and implementation.

PREMIUM TIMES sent a media enquiry to Mr Alabrah, seeking clarification on the reported $100 million investment, the status of the agreement, Fulcrum LNG’s financial commitment, the gas flare sites identified for the project and the proposed ownership and funding arrangements.

Mr Alabrah, in a text message to PREMIUM TIMES, said there was no cause for alarm and that Westpaq International, the facilitator of the deal, would respond to the newspaper’s questions.

He said he had forwarded the enquiry to the company’s chief executive officer and promised to provide further information once he received a response.

The newspaper had yet to receive a response as of the time of filing this report.

Responding to the agreement, Mr Diri described the partnership as a win-win arrangement, saying it was important to reducing environmental pollution and supporting industrialisation.

He said his administration was ready to facilitate the project’s commencement, noting that it had about 15 months remaining in office.

Earlier, during his presentation at the forum, the governor said Bayelsa holds an estimated 15 to 20 per cent of Nigeria’s proven gas reserves and supplies about 60 per cent of the gas used by Nigeria LNG Limited in Bonny, Rivers State.

He also highlighted the state’s 203-kilometre Atlantic coastline and the proposed Agge Deep Seaport as investment opportunities.

The forum, facilitated by Westpaq International in collaboration with the United States Department of Commerce and the US Commercial Service in Houston, brought together representatives of Bayelsa, Nasarawa, Ogun and Ondo states and more than 15 American energy, mining and financial companies.

The Bayelsa delegation included the governor’s Honourary Adviser on Oil and Gas, Daru Owei; Managing Director of Bayelsa State Electricity Company, Olice Kemenanabo; Director-General of Bayelsa Investment Promotion Agency, Patience Abah; and Chief Executive Officer of Century Energy Group, Ken Etete.