NLNG: $10 Billion Train 7 LNG Project to Begin Operations by End of 2027

• Oil rises above $109 on Saudi’s port closure

Emmanuel Addeh in Abuja

Nigeria Liquefied Natural Gas Limited (NLNG) has said its $10 billion Train 7 project is expected to commence operations by the end of 2027, as the company works to raise production and address persistent gas supply constraints. Managing Director of NLNG, Adeleye Falade, disclosed this yesterday on the side-lines of the Gastech conference in Bangkok, Reuters reported.

Train 7 project, located on Bonny Island, Rivers State, is expected to increase NLNG’s production capacity to 30 million metric tonnes per annum (mtpa), from the current 22 mtpa.

The project has suffered repeated delays, including disruptions associated with the COVID-19 pandemic and the Russia-Ukraine war.

Falade also disclosed that NLNG remained under a force majeure declared in 2022 following widespread flooding that disrupted gas supplies to the company.

According to him, the company would lift the force majeure when it reaches a 90 per cent utilisation rate, with the plant currently operating at between 82 per cent and 83 per cent.

“We still have a delta of about 15 per cent that we need to close,” Falade said. “Operationally, we are able to do that, but our biggest constraint is gas supply, and we’re working with all the relevant people, including the government, to be able to get more gas to flow into the plant,” he added.

He said NLNG was focused on meeting its existing contractual obligations to buyers while the company worked to increase production.

Falade added that interest in additional LNG volumes and spot cargoes had increased after exports through the Strait of Hormuz were curtailed by the Iran war.

“People are looking at more diversified, reliable sources of supply,” he said.

“Our priority currently is to continue to make sure that we fulfil our obligations to our existing customers and maximize as much production opportunity as possible that we have,” he added.

NLNG is majority-owned by the Nigerian National Petroleum Company Limited (NNPC), while Shell, TotalEnergies and Eni are its international partners.

Meanwhile, global oil prices surged yesterday, with Brent crude rising above $109 a barrel as supply disruptions in Saudi Arabia and Libya heightened concerns about prolonged constraints in global crude supplies.

Brent crude futures rose $3.49, or 3.3 per cent, to $109.20 a barrel, while United States West Texas Intermediate (WTI) futures gained $5.08, or 5.01 per cent, to $106.46 a barrel. The contracts were on track for their highest closes in nearly four months if the gains held.

The latest price surge followed the suspension of oil loadings at Saudi Arabia’s Red Sea port of Yanbu, while Libya halted operations at three oil fields after members of its Petroleum Facilities Guard shut a valve on the Hamada-Zawiya crude export pipeline.

The supply concerns came after Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia, following an earlier attack on the kingdom’s East-West Pipeline.

The pipeline, a key export route for Saudi crude, was shut following Friday’s attack, while Saudi Arabia also informed some European customers that late-September crude cargoes would be cancelled.

Shipping industry sources subsequently told Reuters that loadings at Yanbu had been suspended, further intensifying concerns about the availability of Saudi crude.

In Libya, the National Oil Corporation (NOC) said operations at three oil fields had been suspended following the pipeline disruption. It warned that it could declare force majeure if the shutdown persisted or spread to additional fields.

According to traders and buyers cited by Reuters, Saudi Arabia could exhaust crude available for export within days unless the East-West Pipeline resumes operations, with the disruption potentially affecting up to four per cent of global oil supply.

The Strait of Hormuz also recorded a sharp decline in vessel traffic, with preliminary data from Kpler showing only four commodity vessels passed through the waterway on Monday, down from 10 the previous day.

Goldman Sachs said the latest developments had increased the probability of Brent crude rising above $120 a barrel in a scenario where average Gulf oil output in 2027 remained four million barrels per day below pre-war levels.