Stories by Chineme Okafor in Abuja
The federal government has said that it will count on the expected expansion of the production capacity of the Nigeria Liquified Petroleum Gas (NLNG) through its Train-7 project to significantly cut down the volume of gas flared in Nigeria as well as reduce the country’s heavy dependence on revenue from crude oil.
Speaking on the back of the recent signing of the Final Investment Decision (FID) by stakeholders of the NLNG on its Train-7 project, the government through Mr. Justice Derefaka who is the Technical Adviser on Gas Business and Policy Implementation to the Minister of State for Petroleum Resources, Mr. Timipre Sylva, said the development was impressive.
Derefaka who is also the Program Manager for the Nigerian Gas Flare Commercialisation Programme (NGFCP), explained that the FID on NLNG Train 7 reinforced the government’s commitment to open up and accelerate gas business in the country.
He said this was in line with the country’s National Gas Policy approved by the government in 2017 to drive up gas-based businesses in the country.
“Recall that the policy clearly articulates the policy goals, strategies, and implementation plan of the federal government of Nigeria to reposition Nigeria as an attractive gas based industrialised nation through the prioritisation of local gas demand requirements. Access to infrastructure, a clearly articulated pricing path and institutional capacity strengthening.
“As you may recall, the minister of state for petroleum resources has declared year 2020 as the year of gas. So, our gas focus for Nigeria is on track,” said Derefaka.
He added that, “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 200Tcf (trillion cubic feet) of proven gas reserves in a bid to cut reliance on oil revenue already hit by a drop in global prices.
“So for me, taking FID for train 7 will help our aspiration in line with the National Gas Policy for Nigeria to become one of the world’s most important LNG gas hubs and help to leverage our abundant associated gas resources as well as further reducing the gas that would otherwise have been flared.”
According to him, the government was excited by the decision of the shareholders of the NLNG to take the FID on its Train 7 which it said was the centerpiece of its growth agenda for the country’s gas industry.
“In terms of kick-off of the project, The project is expected to start up in 2024, it will increase Nigeria’s LNG output capacity by 35 per cent from (the) current levels of 22.5 million metric tonne per year to over 30 million metric tonne per year.
“The expansion project will enable us to produce an additional 7.6 million metric tonne per year of which 4.2 million metric tonne will (come) from one new liquefaction train (Train 7), and 3.4 million metric tonne will come from the debottlenecking of existing trains,” he added.
Derefaka, also explained that from an investor point of view, the NLNG Train-7 FID indicated a renewed hope and confidence of international investors on Nigeria.
“In terms of revenue drive, the train 7 project is expected to generate $20 billion in net revenue for the government and create 10,000 direct jobs during construction phase and 40,000 indirect jobs.
“This expansion will ensure that Nigeria, with its significant gas reserves remains a top, reliable and preferred supplier of LNG in the emerging energy world,” Derefaka stated.
The Train 7 project was expected to complement the existing six-trains and raise Nigeria’s total production capacity from the current 22 million tonnes per annum (MTPA) of LNG to 30 million tonnes per annum, which is an increase of 35 per cent. The NLNG currently has six trains capable of producing 22 million tonnes per annum (MTPA) of LNG, and five MTPA of Natural Gas Liquids (NGLs), that is Liquefied Petroleum Gas (LPG) or cooking gas, and condensate – from 3.5 billion standard cubic feet per day (Bcf/d) of natural gas intake.
The NLNG Train 7 which was signed in the presence of the shareholders would re-awaken activities in the nation’s oil and gas sector after years of inactivity due to project dryness.
The shareholders of the Nigeria LNG Limited include the NNPC, who holds 49 per cent shares on behalf of the federal government; Shell Gas B.V (SGBV), 25.6 per cent; Total Gaz Electricite Holdings France, 15 per cent stake; and Eni International (N.A) N.V.S.a.r.l, with 10.4 per cent stake.
However, with this development, companies and workers will be deployed to site to deliver the project that has been adjudged highly significant to the country’s status as a major player in the global gas market as well as to the economic development of the nation.
Earlier in March, the federal government and the shareholders had signed the Nigerian Content Plan (NCP) worth $1 billion to facilitate the actualisation of the project.
The Managing Director of NLNG Limited, Mr. Tony Attah, had said, the “train 7 is the next big deal for Nigeria. Train 7 is real; Train 7 is here. If you come to Bonny Island today, you will see that early site work has commenced and we are 97 per cent prepared, just waiting to take that Final Investment Decision (FID).”