NNPC, Proton Energy & 4 others sign gas supply agreement

The Nigerian National Petroleum Company, Proton Energy, and four other joint venture partners have recently signed a gas supply agreement for the Proton Delta Sunrise project, a 500-megawatt power plant. Oti Ikomi, the CEO of Proton Energy, provided more details about the project and its significance during an interview with CNBC Africa. The project aims to address the need for improved electricity generation capacity in Nigeria and make a substantial contribution to the country's energy landscape. With the first phase set to deliver 150 megawatts of power, the project represents a crucial step towards enhancing electrification and supporting local communities. Ikomi highlighted the abundant gas resources in Nigeria, with over 209 trillion cubic feet available, making it a strategic choice for powering the plant. The gas supply agreement, executed earlier this year, involves a multi-year partnership between Proton Energy and the SPDC Shell JV, with NNPC, Total Energies, IGP, and I also playing key roles. The arrangement, facilitated by the Gas Aggregation Company of Nigeria (GACN), emphasizes efficient gas utilization, essential for the success of the project. The overall project cost exceeds $250 million, with gas accounting for a significant portion of the expenses. To achieve a financial close by the end of the year, stakeholders are working to secure the necessary funding for the ambitious venture. Proton Energy's commitment to sustainability is evident in the design of the gas-to-power plant, which features a combined cycle system for enhanced efficiency and reduced environmental impact. Partnering with global players like Siemens AG and EPCCMEC, the project aims to incorporate hydrogen fuel technology in the future, aligning with the global push for carbon reduction strategies. Ikomi emphasized the project's support for Nigeria's net zero goals while underscoring the importance of utilizing the country's vast gas reserves responsibly. In addition to its environmental benefits, the Proton Delta Sunrise project promises economic advantages for Nigerian consumers. By leveraging local currency transactions and operating at a competitive cost compared to traditional plants, the project aims to offer electricity at a more affordable rate. With a tariff estimated to be 30% lower than similar projects, the initiative could help alleviate the financial burden of high electricity costs on the average Nigerian household. Ikomi stressed the importance of energy management and efficiency to further optimize the benefits of the project for end consumers. While the focus of the interview centered on the power generation aspect of the project, Ikomi hinted at the importance of considering the entire value chain, including evacuation processes, to ensure seamless electricity delivery. The discussion highlighted the interconnected nature of energy infrastructure and the need for comprehensive planning to maximize the project's impact on Nigeria's energy sector. Despite the challenges ahead, Proton Energy and its partners remain committed to delivering a reliable and sustainable energy solution that will reshape the country's power landscape.