Ima Gas Project FID: The Legal Obligations TotalEnergies, AMNI And Contractors Face Before First Gas

On 23 September 2026, TotalEnergies and AMNI took the Final Investment Decision on the Ima Gas Project, ending a 53-year wait for a gas field first found off Bonny Island in 1973. AMNI holds 60% and TotalEnergies, the operator, holds 40%. The plan is a single platform on the boundary of OML 112 and OML 117, linked to Nigeria LNG by a 22-kilometre pipeline and producing about 350 million standard cubic feet of gas a day, around a third of the feed gas NLNG’s Train 7 expansion needs, with first gas expected in 2028.

FID is where the commercial debate ends. It is not where the legal work ends. Between now and first gas, the project’s financing conditions, gas sales terms with NLNG, construction contracts, Nigerian content obligations, host community trust, flaring rules and tax incentives all have to hold up in practice. Here is what each one requires, and who needs to act.

One common pitfall is the way suppliers interpret “FID.” They often equate it to a contract award and prematurely begin spending. Crews mobilise, guarantees are issued, and yard space is booked. An FID announcement should not be treated as a substitute for an executed purchase order, EPC contract, supply agreement or notice to proceed. Suppliers and contractors should confirm their contractual appointment before incurring material mobilisation or procurement costs.

Ima Gas Project: What Was Approved at FID? 

One offshore platform, powered from shore, sending gas 22 kilometres to Nigeria LNG at Bonny. At plateau it should deliver about 350 million standard cubic feet a day for at least eight years, roughly a third of the feed gas NLNG needs to take Train 7 from 22 to 30 million tonnes a year. The ownership sits 60% with AMNI and 40% with TotalEnergies, which operates the gas development. According to the Presidency, Nigerian banks arranged 77% of the financing, and the key contracts are expected to go to Nigerian companies.

Ima Gas Project Cost: Why Public Figures Differ

Public statements currently use different figures for the Ima development. AMNI puts the estimated development cost at approximately US$1.108 billion, while NNPC and the Presidency have referred to an $800 million FID. And TotalEnergies’ own statement from Paris reportedly describes it as a $600 million FID. Before using either figure for financing, bidding or insurance purposes, stakeholders should confirm the scope, assumptions and cost base each figure represents.

Who Owns the Gas Produced by the Ima Project? 

According to section 44(3) of the 1999 Constitution, all minerals, mineral oils, and natural gas found within Nigeria’s land, territorial waters, and Exclusive Economic Zone are owned and controlled by the Government of the Federation. AMNI and TotalEnergies do not own the gas in situ. Their interests arise through the applicable petroleum rights, licences or leases and the contractual rights governing development, production and sale of the gas, meaning that lenders secure their interests through contractual rights and cash flows, not over the reservoir itself. That is why the legal documents hold more significance than the geological data in making this project a success.

What Legal Work Must Be Managed Between FID and First Gas? 

As the energy sector evolves and projects gain momentum, understanding the legal landscape surrounding them becomes crucial, especially for major undertakings like the one at Ima. For stakeholders involved, from investors to contractors, the journey from Final Investment Decision (FID) to first gas flows is marked by several pivotal legal workstreams.

1. Ima Gas Project Financing: Conditions Precedent and Security 

Financing arrangements are critical because FID does not equate to instant capital drawdown. Where project debt is involved, lenders will typically release funds only after the applicable conditions precedent have been satisfied, including execution of financing documents, security perfection, required approvals and insurance arrangements. In the Ima transaction, financing has separately been reported as secured, so the immediate legal task is to manage and satisfy the obligations attached to that financing rather than assume funding begins only after FID. 

2.Gas Sales to NLNG and the Domestic Gas Delivery Obligation

The revenue generated hinges significantly on how feed gas is delivered to NLNG. Key factors include; performance of the GSA, delivery obligations\, gas quality/specification, quantity/measurement, take-or-pay or payment mechanics, where applicable, force majeure, pipeline availability, delay at NLNG, interface risk between upstream production and LNG operations. 

A straightforward written agreement on who shoulders the costs of stranded readiness is essential for financial transparency.

Additionally, Section 110 of the PIA establishes the domestic gas delivery obligation for upstream lessees. Importantly for a gas development linked to LNG exports, Section 110(15) makes approval for gas supply to export projects subject to prior compliance with the lessee’s domestic gas delivery obligation. The project therefore needs to be assessed not only against its NLNG supply commitments but also against the applicable domestic-gas obligations and NUPRC requirements. 

3. Construction and EPC Contracts: Performance Security, Delay and Contractor Risk 

Construction in shallow waters presents unique challenges, heavily influenced by weather conditions and available marine resources. Here, it is crucial to scrutinise contracts for liquidated damages caps, performance bonds, and parent guarantees, especially when a Nigerian contractor is managing a scope beyond its previous experience.

4. Nigerian Content Compliance and the NCDF 1% Deduction 

Under Sections 7 and 8 of the Nigerian Oil and Gas Industry Content Development Act 2010, an operator must submit a Nigerian Content Plan and obtain the applicable Certificate of Authorisation for the project. Separately, Section 104(2) requires 1% of every qualifying upstream contract to be deducted at source and paid into the Nigerian Content Development Fund (NCDF).

5. Host Communities Development Trust: PIA Compliance and the 3% Contribution 

Section 235 establishes the statutory framework for Host Communities Development Trusts, while Section 240(2) requires each settlor, where applicable through the operator, to contribute 3% of its actual annual operating expenditure of the preceding financial year in the relevant upstream petroleum operations affecting the host communities.

6. Gas Flaring Rules Under the PIA: Sections 104–108

Achieving “zero routine flaring” is not just a marketing slogan; it aligns closely with legal requirements.Sections 104 and 105 of the PIA regulate the flaring and venting of natural gas. Section 104 makes unauthorised flaring or venting an offence subject to limited exceptions, while Section 105 provides for the applicable penalty framework and gives the Commission a right to take gas destined for flaring. The project’s no-flaring design therefore needs to be assessed alongside the PIA and the applicable flaring and environmental regulations.

7. Nigeria Tax Act 2025: Non-Associated Gas Tax Incentives 

The Nigeria Tax Act 2025 now contains statutory tax incentives for qualifying non-associated gas projects, including specified gas-production tax credits and allowances. For Ima, the relevant incentives should be tested against the project’s terrain, first-production timeline, hydrocarbon-liquid content and other statutory conditions, which TotalEnergies credits for making projects like Ima feasible.

Who Needs to Act After Ima’s FID? 

For AMNI and TotalEnergies: the joint operating agreement becomes particularly important during execution. Cash-call obligations, default remedies, cost overruns, approval thresholds, operator authority, abandonment obligations and deadlock provisions can materially affect project delivery and sponsor exposure. 

For Banks and Investors: It is vital to clearly map out every condition precedent linked to a responsible owner and timeline. Foreign investors should diligently assess lease positions, incentive conditions, and the JOA before committing to any agreements.

Contractors, Suppliers, and Engineering Firms: Contractors and suppliers should confirm their Nigerian content approvals, contracting status and NCDF compliance requirements before mobilisation. The 1% NCDF deduction should also be reflected correctly in contract pricing and invoicing 

Insurers: Sections 49 and 50 of the Nigerian Oil and Gas Industry Content Development Act 2010 require applicable oil-and-gas risks to be insured through the Nigerian insurance market, subject to the statutory framework. Offshore placement requires written approval from NAICOM after Nigerian local capacity has been exhausted.

Host Community Representatives: Secure the trust constitution, needs assessment, and development plan in written form. Ensure the operator is held accountable to the signed version rather than promises made publicly.

FAQs

1.What Does FID Mean and Is the Ima Gas Project Fully Funded?

FID stands for Final Investment Decision. It is the point at which project sponsors formally approve the investment and authorise the project to move into execution, subject to the transaction’s contractual and financing structure. FID does not itself mean that every project obligation has been discharged or that all financing has been drawn. 

2. Who Holds the Ima Gas Project Interests and What Is Its Development Cost? 

TotalEnergies operates Ima with a 40% interest, while AMNI holds 60%. AMNI’s September 2026 project announcement estimates development costs at approximately US$1.108 billion, while the Presidency and NNPC have separately referred to an $800 million FID. And TotalEnergies’ own statement from Paris reportedly describes it as a $600 million FID. The differing figures should therefore be treated with care until the underlying scope is confirmed. 

3. Which Laws Govern the Ima Gas Project?

This vital project operates under several key regulations, including:

Petroleum Industry Act 2021

Section 110 — domestic gas delivery obligations

Sections 104-108 — flaring/venting and flare-elimination requirements

Sections 235-256 — host communities development trusts

Nigerian Oil and Gas Industry Content Development Act 2010

Sections 7-8 — Nigerian Content Plan and Certificate of Authorisation

Section 104 — NCDF 1% deduction

Sections 49-50 — oil-and-gas insurance/local capacity

Nigeria Tax Act 2025

relevant gas production tax credit/allowance provisions

Constitution

Section 44(3) — Federal ownership/control of minerals, mineral oils and natural gas.

How Can Nigerian Contractors, Insurers, and Host Communities Get Involved?

Nigerian contractors and suppliers eager to participate need to secure executed agreements and meet specific requirements related to Nigerian content. This includes contributing a 1% levy on upstream contracts. Insurers will also benefit, Sections 49 and 50 of the Nigerian Oil and Gas Industry Content Development Act 2010 require applicable oil-and-gas risks to be insured through the Nigerian insurance market, subject to the statutory framework. Offshore placement requires written approval from NAICOM after Nigerian local capacity has been exhausted. Additionally, host communities stand to gain through the Host Communities Development Trust, funded as per sections 235 and 240 of the PIA, ensuring that they receive tangible benefits from this project.