Oil giants Shell and ChevronTexaco have joined hands with the state-run Nigerian National Petroleum Corp. (NNPC) for a liquefied natural gas project, an NNPC statement said Thursday.

Under a memorandum of understanding signed this week by the firms together with BG International Ltd., the project is expected to have a capacity of 20 million tons per annum from four production lines.

Two of the lines will be owned by Shell and the NNPC while the others by ChevronTexaco, BG and the Nigerian company.

According to the statement, the plant to be known as "OKLNG" is sited in the Olokola free trade zone in the southwestern Nigerian state of Ondo and may start production as early as 2009.

With a proven reserve of 187 trillion cubic feet, the ninth largest in the world, OPEC member Nigeria has targets of attaining zero-gas flare by 2008 and earning 6.5 billion dollars yearly from the gas sector by 2010.

The Olokola plant is part of its efforts to realize the ambitious targets.

"The federal government is very committed to this and other gas projects not only as a way of increasing the country's revenue base, but also to reduce environmental hazards occasioned by gas flaring for which Nigeria was known in the past," the statement noted.

It said that the Olokola project is an outcome of two separate studies conducted by ChevronTexaco and BG, and Shell, for the development of their respective liquefied natural gas projects at Olokola.

"In view of the proposed timing and location of the two independent projects, NNPC identified the opportunity for significant synergy and cost savings to be achieved by merging the two projects into one," the statement added.

Source: Xinhua