The Nibel Reactor is a Mako Reactor that you can reach while travelling through Mount Nibel. It is located in the mountainous regions to the northeast of Nibelheim and can only be reached by travelling through Mount Nibel.
The story takes you to the Nibel Reactor on two different occasions. The first time is during a flashback sequence that occurs at the Kalm Inn after the team leaves Midgar. Check out the Kalm walkthrough page for additional details.
The second time you travel through this area you don’t actually have to visit the Nibel Reactor, but you can if you want to, and you will likely pass by it as you traverse the area in search of items. Check out the Nibelheim walkthrough page for more information.
The Nibel Reactor is a story heavy area and there are no items or shops to explore.
The map below shows the location of Mount Nibel, where you can find the Nibel Reactor, on the World Map: