The Nigeria Liquefied Natural Gas Limited (NLNG), has entered into an agreement with the SCD JV Consortium, with the signing of the Engineering, Procurement and Construction (EPC) contract for LNG Train 7 project.

In a statement in Abuja, the NLNG disclosed that with the signing of the deal with the consortium, comprising affiliates of Saipem, Chiyoda and Daewoo, the design and construction of the facility has officially commenced. 

The NLNG noted that the project was expected to increase the capacity of its current six-train plant by 35 per cent from the extant 22 million tonnes per annum (MTPA) to 30 MTPA, adding that the construction period is expected to last approximately five years with first LNG rundown expected in 2025. 

The company stated that the project was in fulfilment of its vision of being a global Company, helping to build a better Nigeria, adding that upon completion, the project would support the Federal Government’s drive to generate more revenue from Nigeria’s proven gas reserves of about 200 trillion Cubic Feet (Tcf) and further reduce gas flaring in the country’s upstream oil and gas industry.  

Speaking at the signing, Minister of State for Petroleum Resources, Chief Timipre Sylva, declared that Federal Government and shareholders of the NLNG insisted that project must continue despite the devastating impact of the COVID-19 pandemic and crude oil and gas prices, as well as demand and supply of the commodity.

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He said, “We cannot say that any project is immune to the global pandemic but projects like this one must go on. It (COVID-19) is a medical and economic problem. And unless projects like this go on, the economic situation will really not improve. So for us, projects like this will help us to also overcome the pandemic.”

On his part, Managing Director and Chief Executive Officer of the NLNG, Engr. Tony Attah, stated that the EPC contracts represented yet another milestone in NLNG’s journey towards achieving its vision of being a global LNG company, helping to build a better Nigeria. 

He expressed confidence in SCD JV Consortium’s proven competence, adding that the demonstration of an understanding of NLNG’s business philosophy by the consortium would positively influence the execution of the project and ensure zero harm to people, environment and host communities.

He said: “With the award of the EPC contracts to our preferred bidders (SCD JV), we are guaranteeing that our country remains significantly on the global list of LNG suppliers.

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“This singular act clearly demonstrates our shareholders’ determination and resolve to sustain the economic dividends that NLNG’s monetization of our vast natural gas reserves offers our great country Nigeria” 

The NLNG is an incorporated Joint-Venture owned by four shareholders, the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (49 per cent), Shell Gas B.V.  (25.6 per cent), Total Gaz Electricite Holdings France (15 per cent), and Eni International N.A. N.V. S.àr.l (10.4 per cent).  

Also speaking, Group Managing Director of the NNPC, who is also a Director on the NLNG Board, Mr. Mele Kyari, disclosed that proper consultations were done with all stakeholders involved, while he expressed optimism that the project would survive despite COVID-19 impact on the global oil market.

He said, “Every situation and consideration have been taken into account in taking a Final Investment Decision (FID) and releasing the EPC contract today. What that means is that despite this difficulty we are seeing in the global market and the prospect of economic growths being revised downward, this project will survive. 

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“That is why we and our partners confidently agree to release the EPC for the contract. We have no doubt that this project will survive. By the way this project will come to play in five years time.

“So it could come at a time when the global economy would have been completely reversed. I see no much difficulty with this project going forward.”

Kyari also highlighted the NLNG’s successes and its operating model, stating that: “Nigeria LNG’s successes since it started operation in 1999 continue to prove that the company operates a unique business model that is profitable to all its stakeholders. NNPC and the other Shareholders — Shell, Total and Eni — are proud to be a part of this exceptional Nigerian brand that stands out in the global market.

“It is for this reason that our President, Muhammadu Buhari instructed through the Honourable Minister of State for Petroleum Resources that NNPC as a shareholder must do everything possible to support all the other shareholders and NLNG’s management to secure the much-needed public confidence from all critical stakeholders, especially the critical agencies of the Federal Government of Nigeria and international investors, to pursue the Company’s ambition of adding a 7th train to its existing production capacity. 

“I encourage every stakeholder involved in execution of the Train 7 Project, especially the SCD JV Consortium, NLNG Train 7 Project Team and the Company’s Management to leave no stone unturned in making this project a reality.”