NLNG Signs 20-year Gas Supply Agreement for Upcoming Train-7 with IOCs

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Chineme Okafor in Abuja

The Nigeria LNG Limited (NLNG), friday signed what it called “the first Basic 20-year term” of Gas Supply Agreements (GSAs) with International Oil Companies (IOCs) operating in Nigeria for its planned Train-7 LNG plant.

It said in a statement from its General Manager, External Relations, Eyono Fatayi-Williams, that the GSA would enable the supply of feed-gas to Train-7 when operational.

In terms of shareholding, the NLNG is owned by four shareholders, namely, the federal government of Nigeria represented by Nigerian National Petroleum Corporation with 49 per cent of the company’s shares, Shell Gas B.V. which has 25.6 per cent, Total Gaz Electricite Holdings France holding 15 per cent, and Eni International N.A. N. V. S.àr. l with 10.4 per cent.

According to the statement, the development signaled the closing out of another condition necessary for the NLNG to take the Final Investment Decision (FID) on Train-7 which is expected to happen this December.

The NLNG equally disclosed that it signed the second Basic 10-year term of GSAs for its Trains1, 2 and 3 with the IOCs which it disclosed to be Shell Petroleum Development Company of Nigeria Limited (SPDC), Total Exploration and Production Nigeria (TEPNG) and Nigerian Agip Oil Company Limited (NAOC).

It explained that the GSAs would bring NLNG closer to taking FID Train-7, which was expected to increase the production of its plants by 35 per cent as well as improve its competitiveness in the global LNG market when completed.

“The milestone is coming after the issuance of a Letter of Intent for the Engineering, Procurement and Construction (EPC) Contract to SCD JV Consortium in September 2019 as well as the signing of the Nigeria Content (NC) plan with Nigerian Content Development Monitoring Board (NCDMB) in March 2019. SCD JV Consortium is made up of Saipem of Italy, Japan’s Chiyoda and Daewoo of South Korea,” said the statement.

According to it, the Train-7 project would ramp up NLNG’s production capacity from 22 Million Tonnes Per Annum (MTPA) to around 30 MTPA.

“The project will form part of the investment of over US$10 billion including the upstream scope of the LNG value chain, thereby boosting the much needed Foreign Direct Investment (FDI) profile of Nigeria.
“The project is anticipated to create over 10,000 new jobs during its construction phase, and on completion, help to further mop more gas that would have been flared, and diversify the revenue portfolio of the federal government and thus increase its tax base,” the statement added.

The NLNG also stated that the project was in line with its corporate vision of helping to build a better Nigeria, and that the post-FID construction period will last approximately four to five years.