Page 7 - AfrOil Week 01 2020

AfrOil INVESTMENT AfrOil
NIGERIA
THE Nigeria LNG (NLNG) consortium revealed in late December that it had made a final investment decision (FID) on the construc- tion of a seventh production train at its natural gas liquefaction plant on Bonny Island.
The group, which includes Nigerian National Petroleum Corp. (NNPC) and three international majors, said in a statement that it had signed an agreement on the expansion pro- ject on December 27. Italy’s Eni, one of NLNG’s shareholders, issued a press release confirming the FID on the same day.
The expansion deal is more than a year behind schedule. The consortium has delayed the FID several times, and it failed to meet its previous deadline, which fell in the fourth quar- ter of 2018.
In their statements, NLNG and Eni said the construction of the new production train would push the consortium’s output capacity above 30mn tonnes per year, up by 35% on the current level of 22.5mn tpy. Train 7 itself will be able to turn out 4.2mn tpy, Eni noted, and the debottlenecking of existing trains will add another 3.4mn tpy.
The consortium has already secured feed- stock for the new production train. Earlier in December, it signed 20-year gas supply agree- ments with Eni, Royal Dutch Shell (UK/Neth- erlands) and Oando (Nigeria).
NLNG is not the only party set to gain from the FID. Reuters pointed out on December 27 that the project would help Nigeria reverse a decline in LNG output. The West African state was the world’s fifth largest LNG producer in 2018, down from fourth place in 2017, it explained.
Nigeria hopes to make further gains in the years ahead. Mele Kyari, NNPC’s group manag- ing director, said on December 27 that NLNG
was set to expand further. Nigerian President Muhammadu Buhari has instructed the group to build another five production trains, bring- ing the total number up to 12, he said.
Doing so will create 10,000 new jobs in Nigeria and generate an additional $20bn in net budget revenues, Kyari said. Moreover, it will highlight the country’s strong interest in the development of the gas industry, he added.
“It also signifies that there is renewed con- fidence [among] international investors, par- ticularly our partners which we have known for a long time, to still agree to put money back into this country,” he was quoted as saying by Reuters.
Equity in NLNG is divided between NNPC (49%), Shell (25.6%), France’s Total (15%) and Eni (10.4%). The consortium has been turning out LNG since 1999. ™
 Additionally, Zenith will cover up to $5.5mn worth of AAOG Congo’s share of an upcom- ing work programme. The parties will settle the details of this part of the deal after the comple- tion of the execution, the company said.
Andrea Cattaneo, Zenith’s CEO, praised the acquisition deal, saying: “We are delighted to have signed this exciting SPA to acquire AAOG Congo, which represents our first African acquisition and our entry into the attractive jurisdiction of the Republic of the Congo. The acquisition enriches, as well as diversifies, our asset portfolio by adding significant reserves and prospective production potential. This is
line with our company strategy of acquiring assets with significant untapped production potential.”
He continued: “The licence has excellent production upside, specifically from the Mengo and Djeno horizons. This has been confirmed by wireline investigations performed follow- ing recent drilling activities, thereby materi- ally de-risking the asset. Upon assumption of operational control, we shall look to begin preparations for deepening activities in well TLP-103C, obtain full repayment of the funds owed by SNPC, as well as successfully complete negotiations for a new 25-year licence.” ™
Nigeria LNG makes FID
on Train 7 expansion project
Train 7 will raise the LNG plant’s output by 35% (Photo: NLNG)
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