Page 9 - GLNG Week 39
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GLNG AFRICA GLNG
Total comments on Nigeria LNG’s Train 7 project
PROJECTS & COMPANIES
ARNAUD Breuillac, Total’s president of explo- ration and production, said last week that his company expected to make a final investment decision (FID) on the Train 7 project by the end of this year. This will allow the Nigeria LNG consortium to bring the new production train on stream in 2023, he said in New York during Total’s Investor Day.
He did not say exactly when the FID would be made. Nigeria LNG representatives have said previously that the deadline will fall on October 31, 2019.
He also highlighted the importance of the expansion scheme, noting that the construction of a seventh production train at the Bonny Island gas liquefaction plant would raise output from its current level of 22mn tonnes per year. According to previous reports, Train 7 will be able to turn out 8mn tpy of LNG.
The project will help Total achieve its goal of raising LNG’s share of its total production to 22% by 2025, Breuillac said. LNG accounted for 14% of the company’s output in 2018, he noted.
Total is one of four shareholders in Nigeria
LNG, along with Nigeria National Petroleum Corp. (NNPC), Royal Dutch Shell (UK-Nether- lands) and Eni (Italy). NNPC, with 49%, is the largest single stakeholder in the group.
Last month, the group named SCD – a con- sortium formed by Saipem (Italy), Daewoo Engineering & Construction Co. (South Korea) and Chiyoda (Japan) – as its contractor for engi- neering, procurement and construction (EPC) work on Train 7. Once the FID milestone is reached, SCD will be able to start work and wrap up construction of the new production train in four to five years.
Tony Attah, the CEO of Nigeria LNG, said recently that the consortium intended to finance the $10bn expansion project through a combi- nation of debt and equity. In an interview with Bloomberg, he said Nigeria LNG had already begun talks with commercial lenders – includ- ing major Nigerian banks such as Zenith Bank and Guaranty Trust Bank – with the intent of securing $2bn worth of loans. The group hopes to attract the remaining $8bn from foreign banks and export credit agencies, he said.
ASIA
Japan pledges $10bn for global LNG projects
INVESTMENT
THE Japanese government has pledged $10bn of both public and private funding for liquefied natural gas (LNG) projects around the world.
Japanese Minister of Economy, Trade and Industry (METI) Isshu Sugawara said on Sep- tember 26 that the investments would mainly be earmarked for upstream, midstream and down- stream LNG projects in Asia.
“On top of Japan’s commitment two years ago of investing or financing more than $10bn in energy supply chains, we are making a fresh commitment of additional and collective $10bn [in] funding from both public and private sec- tors,” Sugawara said during a keynote speech at the annual LNG Producer-Consumer Confer- ence in Tokyo.
Former trade minister Hiroshige Seko made the original commitment at the same conference in 2017, though the funds were mainly allocated to upstream projects such as LNG Canada and Mozambique LNG, in which Mitsubishi and Mitsui & Co. hold stakes respectively.
Sugawara added that the government would train 500 experts in the LNG technology to add the nearly 500 that Japan has already trained in recent years.
“By making these commitments to help develop the global LNG market, Japan will work hard to reinforce global energy security,” he said. His comments come in the wake of recent attacks on key Saudi Arabian oil production facilities, which has led to an escalation of tensions in the volatile region.
While it might seem counterproductive for Japan, the world’s largest importer of LNG, to support infrastructure projects in other coun- tries, this strategy is a response to a specific set of circumstances.
Spot LNG prices may have fallen this year, but most pricing in Asia remains driven by the oil link, making the feedstock fairly expensive. As Japan turns its nuclear power plants (NPPs) back on – in a move backed by political will and judicial rulings – LNG faces competition.
Given this pressure, it is sensible for Japa- nese companies to bolster alternative desti- nations for contracted supplies. This is given added weight when considering that energy trader JERA revealed in mid-September that it had successfully asked some of its long-term suppliers to drop destination clauses from existing contracts.
Week 39 03•October•2019 w w w . N E W S B A S E . c o m P9
