The federal government’s desire to kick start the Brass LNG project was rekindled with the recent decision of French oil major, Total, not to pull out and the nomination of Danielle Tamborini by Italy’s Eni to replace Giovanni Romani as the new Managing Director of the company. Ejiofor Alike reports
Hopes for the actualisation of the Brass LNG project were rekindled recently after a meeting of the investors in London.
Prior to the shareholders’ meeting, there was uncertainty surrounding the $547 million already plunked into the Olokola LNG project situated on the border town between Ogun and Ondo States, following the withdrawal of the project’s shareholders and a decision by the NNPC to relocate its staff seconded to the project to Abuja.
The fact that these two LNG projects were conceived at the same time might have sent jitters down the spines of investors in the Brass LNG project, who expressed fears that similar fate may befall the project in view of the withdrawal of ConocoPhillips and the initial plan by Total to also pull out of the multi-billion dollar project.
To decide the fate of the project, the chief executives of the Nigerian National Petroleum Corporation (NNPC), Total and ENI met in London with the Board chairman in, Dr. Jackson Gaius-Obaseki, and reaffirmed their strong commitment to the project in which they have invested about $1 billion on early works, without signing a Final Investment Decision (FID).
After the meeting, the investors decided that the Brass LNG project must happen.
It was also gathered that Total, which was thinking of leaving the project, decided not to pull out, reaffirming the faith of the French major on the viability of the project.
One of the shareholders had blamed the delay in signing the FID to the absence of political will on the part of President Goodluck Jonathan’s administration and what he called the protracted withdrawal of ConocoPhillips from the project.
According to him, the shareholders – NNPC, Eni, Total and ConocoPhillips – were at the point of taking the FID before the American oil major pulled out of Nigeria.
“It took them an unusually long time from the period they made the announcement to when they finally pulled out, because apart from looking for investors who will buy their oil fields in Nigeria and their stake in Brass LNG , they were frustrated by bureaucracy.
Before the shareholders’ meeting in London, the shareholder, who spoke to THISDAY, had also given assurance that the Brass LNG project would remain on course, adding that LNG projects were viable, the initial challenges notwithstanding.
“You will recall that the Nigeria LNG bailed out the federal government’s urging their financial crisis. The Brass project is viable but the past administration lacked the political will to pursue the FID. We are hopeful that Brass will go forward. The Minister of State for Petroleum, Dr. Ibe Kachikwu, has been putting a lot effort at securing alternative funding for the oil and gas industry, one of which was the $80 billion funding from the Chinese and Indians. We are hopeful therefore, that funding will not be an insurmantible constraint for Brass LNG.
“We have done a lot of optimisation in Brass LNG project. We have reconstituted our team and changed ConocoPhillip’s technology.
“Our technology now is APCI technology used in building Nigeria LNG. The Managing Director is now from eni. We have scaled down the cost from the initial $20 billion to a level that will ensure affordable cash injection by the shareholders.
“The initial plan was to start with two trains but this has now been staggered to a one-plus-one approach. The shareholders have also warehoused ConocoPhillip’s shares. There is political will on the part of the present administration,” he added.
The outcome of the shareholders’ meeting was an affirmation of the confidence of the investors in the project.
New managing director
It was also at the London meeting that the Italian energy giant, eni was said to have recommended Danielle Tamburini as a replacement for Giovanni Romani, who was retiring as the Managing Director of the company of Brass LNG Limited.
Speaking at the send-off dinner organised later in Lagos in honour of Romani, the Chairman of the Board of Brass LNG, Dr. Jackson Gaius-Obaseki noted that the project has strong fundamentals to turn gas to money and create jobs.
“We, at the Brass LNG Ltd are celebrating tonight because our MD, Giovanni, is leaving us and a successor is stepping into his shoes. We indeed celebrate success of continuity. The Brass LNG has very strong fundamentals; we are there to turn gas to money and create jobs. It is a company that has a pre-FID expenditure in excess of $1 billion. I must say that the last one year was a difficult year, but we can now breathe some air of hope.
Also speaking, the Amanyanabo of Okpoama Kingdom, Bayelsa State, His Royal Majesty, Ebitimi Banigo noted that Brass LNG project brought into his community the opportunities and challenges that follow such projects.
“I must confess that the project is a huge development effort that has come to our community with a huge blessing too, while I have to congratulate everyone for working so hard to survive or revamp a project that was almost on death roll. For us, we believe that this development is a process that will enable all parties to join hands together to ensure that the project succeeds. We must provide the enabling environment to realise the project as well as develop the environment. We shall help in midwifing the project for the good of all. I am here tonight because this is a day to celebrate and to welcome a new era in Brass LNG Ltd. May I add that all challenges you had faced in the past should be seen as opportunity to shape the world, our world,” he explained.
Government’s renewed interest
Speaking on the renewed hopes of investors on the viability of the project, Gaius-Obaseki attributed the latest development on the commitment of the present administration on the project.
“I can say that the present administration has shown a lot of interest in the project, more especially because it is in the Niger Delta. The Group Managing Director of the NNPC and the Minister of State for Petroleum have conveyed the government’s commitment; and also we have no choice but to make it happen. I also had the appreciable discussions with the shareholders and they expressed their commitment to remain on board,” Gaius-Obaseki explained.
“He (GMD) has always been part of Brass LNG. Before he was appointed the Group Executive Director at NNPC, he was the Group General Manager in charge of NNPC’s LNG business. So, he nurtured Brass LNG to where it was and he has expressed strong commitment to the project,” he added.
On the impact of the drop in crude oil prices on the commitment of the shareholders to the Brass LNG project, Gaius-Obaseki said the drop in the price of crude oil to about $30 per barrel at the time, affected a lot of projects all over the world, adding that Brass LNG was not an exception, but expressed delight in the fact that things have since gotten better.
On efforts to find strategic investors to acquire ConocoPhillips’ shares, Gaius-Obaseki said: “NNPC was doing that and as far as I am aware, they are still on board.”
He assured that the exit of Romani would not destabilise the project because “as he is leaving, somebody is taking over as MD”.