Dr. Jackson Gaius-Obaseki
The much-awaited plans to take a Final Investment Decision (FID) on the two-train, 10 million metric tonnes per year (mmt/y) Brass Liquefied Natural Gas (LNG) project will progress after all despite earlier indications by one of the project’s promoters, ConocoPhillips, that it wants to sell its Nigerian assets, the Board of Brass LNG Limited has disclosed.
This was as the Chairman of the Board Brass LNG Ltd, Dr. Jackson Gaius-Obaseki, gave the assurance that contractual agreement for the supply of gas to Brass LNG will not be flouted by suppliers upon the project’s completion and eventual operation.
According to Gaius-Obaseki in his address to executive directors of the company Tuesday at its eighth Annual General Meeting (AGM) in Abuja, the project is expected to see its FID taken within the first quarter (Q1) of 2013.
Gaius-Obaseki stated that: “In recent times, there have been speculations about the future of the project as induced by news in several media channels that ConocoPhillips (COP), which is one of our shareholders, plans to divest from Nigeria and, in effect, from Brass LNG Limited.
“In June 2010, there was a similar report that, I, in company of the other stakeholders, took COP to task and they assured that they would remain and be part of decisions to move the project forward. Following this assurance, the Invitation to Tender (ITT) was launched and this led to our choice of preferred tenderers.”
He said: “Again, when the news of their exit from Nigeria came on air, I, in company of Nigerian National Petroleum Corporation (NNPC) nominated directors, met with COP executive management on the 27th of April 2012. Again, COP was palms up confirming their intention of a possible exit from Nigeria whilst committing to the realisation of that project through supporting it to FID.”
Following this development, Gaius-Obaseki explained to the board that the FID for Brass LNG is in view considering the near completion of all fundamental requirements to its eventual actualisation.
He also confirmed that COP has continued to live up to its commitment to the project as it recently approved a budget that would lead the project to FID.
The NNPC holds 30 per cent equity in the Brass LNG project, while Nigeria’s Bayelsa State government has 10 per cent, LNG Japan has four per cent, Itochu Corporation, three per cent, and a joint venture between Nigerian indigenous company Sahara and France-based Sempra Energy holds two per cent. American oil group, ConocoPhillips, French firm, Total and Italian company Eni also hold 17 per cent stake apiece in the Brass LNG.
Reeling out the activities of Brass LNG Limited within the year under review, Gaius-Obaseki explained that giant steps were taken to move the project forward in 2011, adding that all these were done without loss of quality on the project.
“The bids for the major EPC contracts were received, have been opened and are currently being evaluated, success was achieved in reducing the estimated project capital expenditure (CAPEX) while the negotiation for the Gas Supply Agreement (GSA) with gas suppliers will commence soon,” the chairman said.
He equally informed that the LNG sales negotiation processes have been concluded while negotiation with marketing joint ventures is at a final stage, adding that comfort is drawn from the fact that the project is indeed moving forward.