Making Nigeria a premier gas country

April 21, 2025

Amin Ilyas, group executive chairman of Transoceanic Energy Group, talks to The Energy Year about the potential of Nigeria’s gas sector and the role the company will play in the country’s evolving gas landscape. Transoceanic Energy is a Nigerian integrated energy and power company based in Nigeria developing the country’s gas market.

What is your overall assessment of the gas sector in Nigeria, its potential and the role that Transoceanic will play within this evolving landscape?
Nigeria is one of the world’s top 10 countries in terms of gas reserves. The domestic gas potential is not only still widely untapped, but there is also an undervaluation of the reserves: the estimates show about 200 tcf [5.66 tcm], but they were done decades ago, when the technologies needed to actually assess the true potential were not available, and moreover, back then the world had not yet fully realised the importance of gas.
Today, we might say that gas is slowly but gradually taking over the role that oil used to play in the 1950s and 1960s, when the big IOCs – the so-called Seven Sisters – started shaping the oil landscape; now, major players in gas are rising and about to define a new landscape that will last for decades to come.
Gas is the future, although its development is not going to be as fast as people expect. When you talk about oil, most people look at it just like fuel, but there are countless derivatives that we are using and will keep using, and even if we are starting to consider how to phase out oil, its byproducts will still be crucial.
Within this environment, Nigeria can definitely play a significant part, given its huge market and potential, and we at Transoceanic are spearheading the gas revolution here, as we are very well aware that the first mover advantage is key: whoever positions themselves first in this evolving arena has the chance to shape the gas journey.

How do you evaluate the steps taken by the federal government to promote gas in the domestic industrial chain, and what positive effects could this have on price mechanisms?
The gas sector is picking up. The call for the revaluation of Nigeria’s gas potential has started, backed by federal policies and investment institutions which have been given the go-ahead from the FG [federal government] to support companies that want to invest in the gas chain.
The Tinubu administration has been doing well in pushing forward gas’s adoption, at both industrial and household levels, by enhancing already existing programmes (e.g., the Decade of Gas launched by former president Buhari) and by promoting new incentives for non-associated gas developments and CNG initiatives.
President Bola Ahmed Tinubu’s administration has cut a lot of red tape and streamlined procedures for gas capitalisation, and you can see that these policies have been warmly welcomed, as reflected by the number of gas companies that are springing up.
Overall, more gas utilisation will boost industrialisation and thus create more jobs, and it will also reduce the pressure on the naira and the price of energy and goods.
Here is an example of how things will change: cement is produced at a cheaper rate in Lagos and then transported to Kano, where you buy it for a much higher price, about NGN 2,000-3,000 [USD 1.29-1.94] more per bag. Why? Because of transportation.
Trucks use diesel, which is expensive, and then there is the margin that the dealers want to cut. Ultimately, there is almost a 60% difference in price between cement in Kano and in Lagos. A way to change this is by using cheaper fuels, and CNG is one of them.
If we put this example into a macroeconomic context, we fully realise the domino effect that more accessible energy can have on the economy as a whole, from better costs of building materials to how these can positively impact infrastructure development, economic diversification and ultimately boost Nigeria’s GDP with an increase of forex inflow from exports, either of goods, crude or petroleum products.

 

Can you provide us with the latest updates of your company’s flagship project?
The Transoceanic FLNG Project aims to develop over 3 million tonnes per year of LNG for the international market, 150,000 tonnes per year of LPG for the domestic market and 75,000 bpd of condensates, contributing significantly to the energy stability of Nigeria and Africa and beyond. The feedstock for the project will be sourced from multiple fields located offshore in the Pennington field and more specifically in the shallow water regions close to OML 289.
This OML has five producing wells, and other gas-rich assets (OMLs 86 and 88) near the facility. Overall we have approximately 3.5 tcf [99 bcm] of gas as feedstock for LNG.
The expected products will be mostly LNG, LPG and condensates, with a small amount of naphtha produced as well. In terms of output, we will be producing about 500 mcf [14.2 mcm] of gas per day from our upstream.
We are moving forward, having finished our pre-FEED in November 2024, and we have kicked off feed and hope to reach an FID before the end of this year. Then, our model is to “design one, build many,” as this project can become something bigger than just business for our company. We are looking at it as a way to establish Nigeria as a gas hub.
We said before that gas is the future. LNG is one key component of that future, a resource that, once you have it, will have a queue of offtakers. So far, for example, we have already received interest from international commodity traders and reputable refineries.
The global demand for LNG is rising, and shortages in Europe due to geopolitical tensions are leading countries to look at diversifying their supplier networks, opening opportunities for African nations and companies with capabilities.

What makes your FLNG project stand out in terms of innovation and technology?
As part of the development plan, the project will also deploy floating power barges that we are implementing with a global leader in floating power solutions. These will be ready-to-go power barges with 1 GW of total power, which will be paired with their own substations.
These power barges have already been used in Europe, but for Africa, this would be a first. All you need to do is extract the dry gas from the well and plug it into the grid. From there, you can start delivering light immediately, bypassing any bottlenecks. It is a game-changing technology.
We are working on implementing it, but first we need to finalise the FLNG project since we need the gas to power the barge. Our ultimate aim is to have a 1-GW barge system developed in four phases, starting with a Phase 1 that delivers 250 MW that will plug into the ongoing transmission and distribution infrastructure in the power sector. The first 250-MW phase will see about 30-40% of the power consumed by the FLNG facility, while the remaining power will be sold off.

What is the plan for your LNG output and the strategy for leading Transoceanic into becoming a benchmark player in the gas market?
20-25% of our output will be devoted to spot markets, which will give us the flexibility to go along with price trends, selling when they are higher. Then, a certain amount will go to the investors which have put their money in debt and equity: there is going to be a prepayment for gas offtake, where they will secure their slots.
Some of our financers in fact wanted to fund the project in exchange for gas. We locked those interested parties in, having already agreed on a certain price to which we will stick to once we start production and offtake.
Regarding our strategy, we have a 10-year vision. At the end of it, we plan to have four to five floating LNG facilities along the coast, and we will aim to expand beyond Nigeria. Currently, we have other upstream opportunities in a few countries for asset development. Our strategy will turn Transoceanic into a reference point for oil and gas worldwide; we’ll be an IOC with our HQ in Abuja.

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