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NLNG Train7: Shareholders delay $12bn investment

By on April 14, 2013

The continued delay of the Train7 project of the Nigeria Liquefied Natural Gas Limited is holding back fresh Foreign Direct Investment worth $12bn that should have been flowing into the country.

Our correspondent learnt that it was also delaying about 13,000 jobs expected to be created by the project.

Apart from the $12bn FDI and 13,000 jobs, the NLNG Managing Director, Mr. Babs Omotowa, said the project would also fetch the government annual revenue of $3bn.

He said, “We are expecting Foreign Direct Investment of $12bn from our proposed Train7 plant, which we hope will be completed within the next four years.

“The project is expected to create 13,000 new jobs and generate $3bn revenue annually for the government.”

Omotowa said this during a recent one-day facility tour of the NLNG plant in Bonny Island, Rivers State, by the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga.

The NLNG is jointly owned by the Nigerian National Petroleum Corporation (49 per cent); Shell (26.6 per cent); Total LNG Nigeria Limited (15 per cent) and Eni (10.4 per cent).

“The NLNG six-train complex is the biggest gas consumer/exporter in Nigeria with its current daily consumption of 3.5Bcf/d, equal to the total consumption of an industrialised country like the Netherlands,” the 2013 Facts and Figures report on NLNG said.

The Train 7 NLG project, according to the NLNG, will lift NLNG’s total gas production capacity from the current 23 metric tonnes per annum of LNG to 30mtpa.

However, NLNG had attributed the delay in the commencement of the Train 7 LNG project to the inability of the company’s shareholders to make the Final Investment Decision.

A senior official in the company, who asked not to be named, said plans were now at advanced stage to commence the project.

“All the necessary ground works for the Train 7 have been done. We are just waiting for the shareholders to make the final decision.”

The official stated that the company was currently attending to some preliminary early site preparation work on the Train 7 project, but reiterated that the commencement of the project would only be determined by how early the shareholders took the FID.

According to the NLNG, the project is expected to advance to the next stage as soon as the shareholders make the decision.

Speaking further on the milestone achieved by the company, Omotowa said, “NLNG Limited has been doing very well. From 1989 till date, we have earned over $60bn, which means that if we had started about 30 years earlier as it was initially conceived, we should have earned additional $130bn.

“But since we have been in operation, we have been able to pay back $22bn to the shareholders, of which the Nigerian National Petroleum Corporation owns 49 per cent.”

He also said, “As part of the Federal Government’s incentive to the NLNG, we were given tax holiday but by this year (2013), we will start paying company income tax and we are projecting that about $1bn tax will be paid to the government.

“In terms of cargo, we believe that before the end of this year, we will have close to 400 cargoes of liquefied natural gas leaving our jetty here in Nigeria for export.”

Speaking during the 2013 Annual Olobiri Lecture Series and Energy Forum organised by the Society of Petroleum Engineers recently in Lagos, Omotowa said the NLNG was now contributing four per cent to the country’s Gross Domestic Product.

“This is first time that the Nigerian government will provide none regulatory measures to encourage gas utilisation; this has created the enabling environment for Nigerian investors to partner with the International Oil Companies. As at today, NLNG is producing seven per cent of global liquefied natural gas.”

The Chairman, Emerald Energy Resources Limited, Dr. Emmanuel Egbogah, said last year that building the seventh train of the NLNG plant would bring in FDI estimated at over $8bn and help to significantly reduce flared gas and improve the country’s revenue profile.

 

 

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