NLGN ‘Train 7 Project’ Launch To Provide 3m Jobs, Reduce Gas Flaring

NLGN ‘Train 7 Project’ Launch To Provide 3m Jobs, Reduce Gas Flaring
ndic advert

… As Buhari calls for timely completion

President Muhammadu Buhari has charged that the Nigeria Liquefied Natural Gas (NLNG) Train 7 be delivered on time so that the Train 8 project can commence.

https://aljazirahnews.com/wp-content/uploads/2021/06/cbn-keep-the-naira-clean.gif

The President gave the charge at the virtual groundbreaking ceremony of the project in Bonny Island, Rivers State, according to a statement by presidential spokesman Femi Adesina.

He urged the Board of Directors, management and staff of NLNG, the host communities, the Rivers State Government and other Agencies of the Federal Government to continue to collaborate to ensure completion and eventual commissioning of the Train 7 project “safely and on time.”

”As we flag off the Train 7 project today, I look forward to the development and execution of more gas projects by the International Oil Companies (IOCs) and indigenous operators, and more Trains from Nigeria LNG to harness the over 600 trillion cubic feet of proven gas reserves we are endowed with.

”Let me use this opportunity to commend the shareholders of NLNG, the Federal Ministry of Petroleum, NNPC and the NCDMB and other stakeholders for very exemplary collaboration which has culminated in this great opportunity for Train 7.

”I want to thank the foreign investors for the confidence reposed in Nigeria, and assure all Nigerians and potential investors in the Oil and Gas sector that the Federal Government will continue to create the enabling environment in order to develop the sector and bring the full benefits of Gas closer to our people,” he said.

Going down memory lane, President Buhari recounted that the story of Nigeria LNG was one he had been “passionately associated with during the formative years of the project.”

He said: “As Minister of Petroleum Resources, I kicked off our first foray in LNG Business in 1978. At the time it was already apparent that Nigeria was mainly a gas-rich country with a little oil!

”It therefore gives me great joy to see the organization transform from just a project in the early 90s to a very successful company with over 20 years of responsible operations and steady supply of Liquefied Natural Gas, Liquefied Petroleum Gas and Natural Gas Liquids into the global market.

”This is proof that Nigeria has great capacity to deliver value to the world by harnessing our natural resources”.

The President, therefore, congratulated NLNG and its shareholders – NNPC, Shell, Total and Eni for proving that a Nigerian company can operate a world class business safely, profitably and responsibly.

Praising the consortium for clearly setting the stage upon which Nigeria’s vast gas resources will continue to grow well into the future, the President added that the focus of his administration is to boost the development of Nigeria’s abundant gas resources, strengthen the gas value chain, develop the much-needed infrastructure and enhance safe operations in the sector as outlined in the National Gas Policy of 2017.

Also Read:  Herdsmen Allegedly Kill Three Policemen In Taraba

”Through the Decade of Gas initiative, which I recently launched, we will transform Nigeria into a major gas and industrialised nation with gas playing the key role as revenue earner, fuel for industries and necessary feed for petrochemicals and fertiliser plants,” he said.

The President also expressed delight that the NLNG as the pioneer LNG company in Nigeria, has conscientiously proven the viability of the gas sector over the years, currently contributing about one percent to Nigeria’s GDP.

”NLNG has generated $114 billion in revenues over the years, paid $9 billion in taxes; $18 billion in dividends to the Federal Government and $15 billion in feed gas purchase.

”These are commendable accomplishments by the company’s 100 percent Nigerian Management Team.

”With this level of performance, I can only hope that the company continues to grow starting with this Train 7 project but also positioning Nigeria to thrive through the energy transition,” he said.

In his address, the Minister of State for Petroleum Resources, Timipre Sylva described NLNG as a ”blessing to the nation”, noting that it has positively complemented crude oil exploration by monetising flared gas and yielding huge revenue to the nation and investors.

Sylva added that since NLNG became operational in 1999, the nation has recorded a drastic reduction in operational flare status from 65 per cent to 12 per cent.

”I boldly say that the ground breaking of Train 7 is a guarantee to every stakeholder of more dividends in terms of further reduction in gas flaring, more revenue to the nation and shareholders, more job opportunities especially at the construction phase and more social investments for the society, ” he said.

Also speaking, Anthony Attah, the Managing Director and Chief Executive Officer of NLNG, said the Train 7 will increase NLNG’s overall capacity to 30 million tonnes per annum (mtpa) from the current 22 million mtpa, while further adding immense value to the nation and the people.

Attah noted that the project would stimulate inflow of about 10 billion dollars FDI into Nigeria, create 12,000 direct jobs in Bonny Island and additional 40,000 indirect construction jobs.

He said the project would also further the development of local capacity and businesses through the 100 per cent in-country execution of construction works, fabrications and major procurement.

‘‘Nigeria has ridden on the back of oil for over 50 years, but with this Train 7 project Nigeria is now set and I believe it is now time to fly on the wings of gas,’’ he said.

Also Read:  No Going Back On Democracy, Says Buhari

Recalled that the Nigeria Liquefied Natural Gas (NLNG) had signed Engineering, Procurement and Construction (EPC) contracts with the SCD Joint Venture Consortium on the long-awaited LNG expansion plan, described as the Train 7 Project.

Estimated to cost about $6 billion, the project is expected to increase the six processing units (trains) of the NLNG plant at Bonny Island to seven trains. This will increase the current installed capacity of the plant from 22 million tonnes per annum (mtpa) by 7.6 mtpa. Led by the Italian multinational, Saipem, with a share of $2.7 billion of the contract value, other members of the consortium are Japan’s Chiyoda Corporation and Daewoo Engineering & Construction of South Korea.     
The fall in crude oil prices has negatively impacted gas prices as global natural gas prices are usually indexed to crude oil prices. But despite the drop in natural gas prices – which started in recent years with the supply glut largely caused by shale gas production in the United States and unconventional gas production elsewhere in the world, and recent pressure on prices due to the Covid-19 pandemic – the commencement of construction on the NLNG Train 7 project will provide a timely economic boost to the Nigerian gas sector in particular and the Nigerian economy as a whole.

The project has added new profiles to the domestic gas sector. A consortium of some Nigerian banks, international development finance institutions, as well as three export credit agencies will provide $3 billion of debt financing for the project, making it the world’s first LNG project with multi-tranche corporate financing. According to Templars, the Nigerian law firm that advised the lenders, the amount is the largest debt financing on the continent thus far in 2020.
Jason Kerr of the New York-based White & Case LLP who was the international counsel to the lending consortium said the financing support for the project in the middle of a pandemic shows the high esteem the NLNG is held in the international markets. With this ground-breaking pact with the consortium, the NLNG is not only consolidating its standing as the leading LNG brand on the continent; it is also providing the blueprint for multi-tranche corporate financing in future large-scale LNG projects.

Incorporated in 1989 as a Joint Venture (JV) of the Nigerian National Petroleum Corporation (NNPC) with Shell Gas B.V., Total LNG Nigeria Ltd. and Eni International, the NLNG was regarded as the fastest growing LNG Company in the world a few years after it started operation in 1999. The company was constantly adding liquefaction trains to its plant. But since 2006, not much has been done in terms of expanding its capacity due to the failure by NNPC and its JV partners to reach an agreement.

Also Read:  COVID-19: Kano May Record Upsurge In Positive Cases – Ganduje

While the installed capacity of the NLNG plant stalled for over a decade, the Nigerian government tried to launch new LNG projects but without much success. Former President Olusegun Obasanjo launched the Olokola LNG project a few months to the end of his two-term tenure in 2007. The siting of the project in his home state of Ogun elevated parochial reasoning over economic and technical considerations. The project was disadvantaged from the beginning due its lack of proximity to sources of feed gas. Similarly, former President Goodluck Jonathan prioritised the Brass LNG, another green field project, over the expansion of the NLNG.
When completed in 2025, the 7-train LNG facility is expected to bolster the NLNG’s contribution to the development of the country on multiple fronts. Up until now, the NLNG has paid out about $15 billion in dividends to shareholders and $7 billion in taxes to the Nigerian government. Over the last 20 years, the NLNG has helped the country’s oil industry to reduce its gas flaring from 65 per cent to below 25 per cent, generating revenue of over $100 billion in the process.

With a 35 per cent increase in installed capacity, more value will be generated from the 200.79 trillion cubic feet (tcf) of gas reserves in Nigeria. The project is also expected to generate $20 billion in net revenue for the government. The increased capacity will also support the renewed commitment of the government to continue to reduce gas flaring in the country’s upstream oil and gas industry.

Currently, the bulk of the feed gas used to run the NLNG’s existing plant are the associated gas, which are by-products of crude oil exploration. The project’s feed gas demand will stimulate investments in other upstream gas supply projects and resuscitate some stranded natural gas fields in Nigeria.

Aljazirahnews


Tags assigned to this article:
muhammadu buhariNLGN Train 7 Project