Linking NLNG Train-7 To National Gas Policy Implementation

The Federal Government is optimistic that the Final Investment Decision recently taken on the Nigeria Liquefied Natural Gas Train-7 project will boost the implementation of the National Gas Policy.

When the Minister of State for Petroleum Resources, Timipre Sylva, recently declared 2020 as Nigeria’s year of gas, not many believed the target was attainable.

But with the Final Investment Decision taken on the Nigeria Liquefied Natural Gas Train-7 less than two weeks ago, the government says Nigeria is indeed on course to become a leading gas nation.

The Technical Adviser, Gas Business and Policy Implementation to the Minister of State for Petroleum Resources, Justice Derefaka, confirmed this.

He disclosed this to our correspondent in Abuja, while commenting on the investment decision on Train-7.

He said, “For starters, Train-7 means growth for the Nigerian oil and gas industry. Part of the project will guarantee gas supply in the upstream sector. This will open up new development opportunities in the industry.

“As a nation, we have been looking to expand export markets for our more than 200 trillion cubic feet of proven gas reserves in a bid to cut reliance on oil revenue already hit by a drop in global prices.”

On December 27, 2019, shareholders of the NLNG took FID on the Train-7 project, kick-starting the commencement of the $10bn LNG expansion project of the company.

The shareholders of the NLNG are the Federal Government, represented by the Nigerian National Petroleum Corporation with 49 per cent shareholding; Shell with 25.6 per cent; Total Gaz Electricite Holdings, 15 per cent; and Eni, 10.4 per cent.

The FID on Train-7 came 12 years after the completion of Train-6 in 2007 and it happened 20 years after Train-1 came on stream.

The Managing Director/Chief Executive Officer, Nigeria LNG, Tony Attah, had explained that the Train-7 project construction period after the FID would last approximately five years, with first LNG rundown expected in 2024.

The implementation of policies contained in the 2017 National Gas Policy document will be accelerated by the Final Investment Decision that was recently taken on the Nigeria Liquefied Natural Gas Train-7, Derefaka said.

According to him, the FID on the NLNG Train-7 will further help in implanting the goals of the gas policy, as well as reposition Nigeria as an attractive gas-based nation.

Derefaka, who doubles as the Programme Manager, Nigerian Gas Flare Commercialisation Programme, said, “This milestone reinforces the Federal Government’s commitment to the acceleration of the gas revolution.

“And it is in line with the June 28, 2017 approved National Gas Policy, which essentially builds on the ministerial mandate and policy goals and initiatives.”

He added, “Recall that the policy clearly articulates the goals, strategies and implementation plan of the Federal Government to reposition Nigeria as an attractive gas based industrialised nation.”

He stated that this would be through the prioritisation of local gas demand requirements, access to infrastructure, an articulated pricing path and institutional capacity strengthening.

Attah also noted that the FID had unblocked the hurdles hindering the actualisation of additional trains, up to Train-12, which was the ultimate target.

“There are many hurdles which Train-7 has unblocked, and that is what I mean when I say history is about to repeat itself,” he said.

Attach added, “The original ambition for the NLNG as a company was just Trains-1 and 2, but on the back of Trains-1 and 2 FID, which perhaps took so long, it took 30 years actually, to get to those two trains; but once their FID was taken, we went to Trains-3,4,5, 6.

“I believe that history is repeating itself today and it is worth celebrating that Train-7 has unblocked many hurdles; Train-7 is the gate-opener and I believe that we would go to Trains-8,9,10,11 and 12.”

Derefaka also affirmed that taking the FID for Train-7 would help the nation’s aspiration to become one of the world’s most important LNG gas hubs as stated in the National Gas Policy.

“It will help to leverage our abundant associated gas resources as well as further reducing the gas that would have been flared,” he said.

Derefaka noted that in terms of the kick-off of the project, the Train-7 facility was expected to start in 2024 and would increase Nigeria’s LNG output capacity by 35 per cent from the current 22.5 million metric tonnes per annum to over 30 million MTPA.

He said, “The expansion project will enable us to produce an additional 7.6 million MTPA of which 4.2 million metric tonnes will come from one new liquefaction train (Train-7), and 3.4 million metric tonnes will come from the debottlenecking of existing trains.”

From an investor point of view, he explained that the taking of the FID on Train-7 was an indication that there was renewed hope and confidence by international investors, particularly those doing business with Nigeria over the years.

Derefaka stated that in terms of revenue drive, the Train-7 project was expected to generate $20bn in net revenue for the government and create 10,000 direct jobs during construction phase and 40,000 indirect jobs.

“On the next step for the NLNG, I would say we have a marching order from Mr President to begin to look at taking concrete steps for Train-12 because the window of opportunity is there,” he stated.

He noted that the project would also support the development of local engineering and fabrication capacity.

According to him, the project will ensure that Nigeria, with its significant gas reserves, remains a top, reliable and preferred supplier of the LNG in the emerging energy world.

The Chairman, NLNG Limited, Osobonye Longjohn, had also stated that the company would do all it could to see that it built more trains, especially to match its contemporaries.

He said, “If our contemporaries are getting five trains at a go, what stops us from getting seven trains at a go? I want to assure the President and all Nigerians that we would do our utmost to match our contemporaries.”

In September 2019, the NLNG announced that the SCD Joint Venture Consortium, comprising Saipem of Italy, Japan’s Chiyoda and Daewoo of South Korea, had emerged the preferred bidder for its Liquefied Natural Gas Train-7 project, and were awarded the contract to undertake the engineering, procurement and construction for the project.

Source: Punch