Don't Miss


Home   >   Business   >   Industries   >   Energy   >   Market uncertainties delay NLNG Train 7 project

Market uncertainties delay NLNG Train 7 project

By on July 31, 2014

Uncertainties and prevailing market dynamics have been identified as critical factors for the continuous delay of the 8.4 million-tonne per annum Train 7 project of the Nigeria Liquefied Natural Gas.

The project stakeholders, our correspondent gathered, had decided to hold on as far as the project was concerned until the market conditions locally and internationally became favourable.

Currently, the engineering design and technology framework for the project are ready alongside the financing plan. The site for the project has also been acquired, according to a situation report by the NLNG.

Speaking during an interview with our correspondent, the Deputy Managing Director, NLNG, Mr. Isa Inuwa, said the company was keeping the Train 7 LNG plan “warm.”

“When I say warm, I mean our designs are in place. We look at them once in a while and listen to developments in technology. The site is also there, but because of the nature of the soil, we have to continuously compact,” he explained.

On the reason(s) for the delay, Inuwa said, “The point is that the NLNG and its partners are looking at the market and we will take a decision at the appropriate time.”

While addressing delegates from the Nigerian National Petroleum Corporation led by the Group Managing Director, Mr. Andrew Yakubu, who visited the NLNG at Bonny Island, Rivers State, Inuwa said, the financing plan for the project had been done and funding was unlikely to be an issue.

“I hope it (funding) is not. I don’t think it will be for several reasons. For as long as the market is favourable for the end product, you have a market. As long as the economics are right, we will have funding,” he said.

The NLNG has six operational trains and the entire complex is capable of producing 22 million tonnes per annum of Liquefied Natural Gas and five million tonnes per annum of Liquefied Petroleum Gas and condensates from an intake of 3.5 billion standard cubic feet per day of natural gas.

Under long-term Gas Supply Agreements with three Joint Ventures, the NLNG receives natural gas (feedgas) supply from Shell Petroleum Development Company of Nigeria Limited, Total Exploration Production Nigeria and Nigerian Agip Oil Company Limited.

The Niger Delta Petroleum Resources, an indigenous marginal field operator, also supplies 35mmcf/d of NLNG daily feedstock under a special supply arrangement with the SPDC JV.

The failure to take the Final Investment Decision has been delaying the building of Train 7, which will lift the total production capacity of the plant to 30 million tonnes per annum of LNG.

Inuwa also insisted that the NLNG had a reputation in the financial market as a reliable debtor, and was very likely to get all the funding it required for the Train 7 project.

Some industry players had blamed the delay in taking the FID for the Train 7 project on non-commitment by gas suppliers.

Others have also attributed the delay in the project takeoff to the non-passage of the Petroleum Industry Bill and that the International Oil Companies operating in the country were not ready to invest in major oil and gas projects due to certain clauses in the proposed bill.

However, the Chief Executive/Managing Director, NLNG, Mr. Babs Omotowa, said that the next phase of the company’s growth programme included the addition of a seventh train to the existing six.

According to him, the train will enable the company to add some eight million metric tonnes to its current production capacity and increase annual output to 30 million metric tonnes when completed.

 

 

[Punch]