ExxonMobil, Nigeria plan gas-to-liquid project

LAGOS, June 4 (Reuters) - Nigeria's state oil firm and the local arm of Exxon Mobil (XOM.N) began work on Wednesday on plans for a natural gas to liquid petroleum plant, a project the country hopes will reduce its dependence on imported fuel.

Nigeria is the world's eighth biggest oil exporter but its four state-owned refineries have frequent production problems, largely due to mismanagement and vandalism, saddling it with an annual fuel import bill of some $4 billion.

With oil prices expected to continue hitting record highs, those costs are likely to rise. International oil companies are meanwhile using higher price assumptions for business planning, making a greater range of project viable.

"The project will use the latest technology to convert gas to liquid for petrol and will significantly reduce the nation's importation of petrol," Nigeria's Oil Minister Odein Ajumogobia said in a statement.

"It is in line with government's aspiration to utilise the nation's abundant natural gas resources," he said at a ceremony launching two committees to oversee the project.

John Chaplin, managing director of Exxon's subsidiary Mobil Producing Nigeria, said the project will involve the building of port facilities in the southeastern state of Akwa Ibom and said Exxon was committed to being a "catalyst for development".

ExxonMobil said its chairman and chief executive, Rex Tillerson, had discussed the project with Nigerian President Umaru Yar'Adua during a visit in March.

The company said the project was still in the planning stages and gave no details of a timeframe or production potential.

(For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ ) (Reporting by Nick Tattersall)