President Muhammadu Buhari, last Tuesday, flagged off construction of NLNG’s Train 7 Project. ADEOLA YUSUF, who monitored the groundbreaking, probes the pros and cons of the biggest Liquefied Natural Gas project in Nigeria
The President of the Federal Republic of Nigeria, Muhammadu Buhari, on Tuesday, June 14, flagged off the construction of Nigeria LNG Limited’s (NLNG) Train 7 project during the groundbreaking ceremony at the company’s plant site on Bonny Island, Rivers State.
The project is expected to increase NLNG’s current sixtrain plant capacity by about 35 per cent from an extant 22 million tonnes per annum (MTPA) to 30 MTPA. The foundation stone was laid on behalf of President Buhari, who flagged off the project virtually, by the Minister of State for Petroleum Resources, Chief Timipre Sylva. What is special about the project? President Buhari provided an answer to this question in his address.
According to him, the groundbreaking was “an important milestone in the history of Nigeria’s oil and gas industry, adding that “the story of Nigeria LNG is one that I have been so passionately associated with during the formative years of the NLNG project. It has transformed from a project over the years to a very successful company.
“This groundbreaking ceremony to herald the Train 7 project construction has afforded me the opportunity to congratulate NLNG and its company’s shareholders – NNPC, Shell, Total, and Eni – for proving that a Nigerian company can operate a worldclass business safely, profitably, and responsibly. Clearly, you have set the stage upon which Nigeria’s vast gas resources will continue to grow well into the future.”
Viability of NLNG
Stating that he was proud that NLNG, as the pioneer LNG company in Nigeria, has conscientiously proven the viability of the gas sector over the years, Buhari maintained that the company is “currently contributing about one per cent to our country’s GDP. NLNG has generated $114 billion in revenue 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 per cent 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.
I hereby urge the board of directors, management and staff of Nigeria LNG, the host communities, the Rivers State government and agencies of the Federal Government to continue to collaborate to ensure completion and eventual commissioning of the Train 7 project safely and on time, so that Train 8 can then start,” he said.
The roll call and messages
Sylva was supported by the Governor of Rivers State, Nyesom Wike, represented by his deputy, Dr. (Mrs.) Ipalibo Harry Banigo. Also presen were the Amanyanabo of Grand Bonny Kingdom, His Majesty, King Edward Asimini William Dappa Pepple III, Perekule XI; Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari; the Chairman, NLNG Board of Directors, Dr. Edmund Daukoru, NLNG’s Managing Director/ CEO, Tony Attah and NLNG’s Deputy Managing Director, Sadeeq Mai-Bornu, amongst others.
Other dignitaries who graced the event were the Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, NLNG board of directors, NNPC board of directors, senators, members of the company’s senior management team and other special guests.
Wike applauded the shareholders, NLNG’s board of directors, and the company’s management for keeping the Train 7 dream alive. He said the state government considered the project as a key economic enabler and committed to supporting both the project and the company. Sylvia stated that Train 7 would contribute to maintain ing the country’s status as a gas exporting nation.
He said: “Nigeria has more gas reserves than crude oil, and we have much to gain from sustaining our LNG exports to a market that has a growing demand for the commodity as the preferred fuel for industrialisation and power generation.”
In his welcome remarks, Kyari commended the Federal Government for supporting the project and called for stakeholders’ support for the project. He added that support for NLNG would lead to immense benefits to Nigerians.
Attah, in his welcome remarks, said the benefits of gas to the country would increase on the back of this Train 7 Project. He added that Train 7 would stimulate the inflow of over $10 billion foreign direct investment into Nigeria as part of the project scope; create more than12,000 direct jobs and additional 40,000 indirect construction jobs; and develop Nigerian local capacity and businesses.
He also stated that the increase in volume supply to the global market as a result of Train 7 would keep NLNG and the country on top of the suppliers’ chart as world LNG demand grows.
The company took the Final Investment Decision (FID) for the project in December 2019. It proceeded to sign the Engineering, Procurement and Construction (EPC) contracts with the SCD JV Consortium, comprising affiliates of Saipem, Chiyoda and Daewoo, on May 13, 2020. Train 7 Project is in fulfilment of NLNG’s vision of “being a global company, helping to build a better Nigeria.”
The project, upon completion, will support the Federal Government’s drive to generate more revenue from Nigeria’s proven gas reserves and further reduce gas flaring in the country’s upstream oil and gas industry.
Attah said: “Shortly after the sixth train was added to our maintainoperations in 2007, our aspiration to achieve a seventh train began to take root. Various uncertainties delayed the project, but our shareholders stuck to their guns and with enormous support from the Federal Government through engagements with the Minister of State for Petroleum Resources, Chief Timipre Sylva, we are here today to witness the ground-breaking ceremony of our long-awaited Train 7 project.
“In Nigeria LNG, we have always distinguished ourselves as development partners with the government of Nigeria at all levels, and this is a commitment we demonstrate through our sustainable development initiatives and excellent performance which include payment of over $9 billion in taxes and $18 billion as dividends to the Federal Government of Nigeria, through NNPC’s 49 per cent shareholding.
“Through our operations, Nigeria’s gas flaring profile has improved from about 65 per cent, which made us the 2nd gas flaring nation in the world behind Russia to less than 12 per cent today improving our standing to 7th position which I believe will improve even further with Train 7.”
Still on benefits of gas
In 2007, Nigeria LNG, Attah continued, responded to “a chronic supply shortage of LPG in Nigeria and, as at today, we are committed to supplying up to 450,000 tonnes of LPG to Nigerian market annually. Just last week, we signed our very first Sales and Purchase Agreements (SPAs) with three Nigerian companies to supply over one million tonnes of LNG to the domestic market annually.
We have proven our commitment through numerous corporate social responsibilities, including the Nigerian Prize for Literature, which is the most prestigious award for literature in sub-Sahara Africa and The Nigeria Prize for Science, both pitched at $100,000 each.
“Our undergraduate scholarship scheme has benefited over 5,000 students in our communities and to date we have sponsored over 75 young Nigerians to top universities in the United Kingdom through our overseas post-graduate scholarship programme.
“Nigeria LNG continues to support the Bonny Vocational Center (BVC) and our Youth Empowerment Scheme (YES) which collectively train our people on the island to become employers of labour themselves.
“On health support, Nigeria LNG recently signed an MoU to partner with the U.S. Agency for International Development (USAID) and the U.S. Center for Disease Control, pursuant to the elimination and control of malaria on Bonny Island as part of our Bonny Malaria Elimination Project (“BNYMEP”).
Also, over 3000 people have now enrolled in our community health insurance scheme, which makes health care more accessible and affordable for our people at just N10,000/year for full insurance coverage.
“We are very excited about the prospect of linking Bonny Island to mainland Port Harcourt by road for the very first time in history, with a 38 kilometre Bonny Bodo road, valued at N120 billion with NLNG contributing 50 per cent of the project value.
“The benefits to our people will definitely increase on the back of this Train 7 Project, which will expand our capacity by 35 per cent from 22MTPA to 30MTPA.”
The project, which is scheduled to span approximately five years, will be funded through the NLNG shareholding structures. Nigeria seems to be on Train 7 trip to gas prosperity. Therefore, all stakeholders must put hand on deck to ensure the timely completion of the project.