Page 12 - GLNG Week 20

GLNG AFRICA GLNG
NLNG eyes Nigerian domestic market
PROJECTS & COMPANIES
THE Nigeria LNG (NLNG) consortium has said it hopes to start selling some of its production on the domestic market.
To date, NLNG has focused on the export market. But it is now interested in serving cus- tomers in Nigeria, according to Tony Attah, the group’s managing director and CEO. To this end, it is “engaging market players to kick-start [a] domestic LNG scheme,” he said during a virtual business forum organised by the Nigerian Gas Association (NGA).
Attah did not reveal many details of NLNG’s plan. He noted, though, that the consortium already had a foothold in the Nigerian fuel market – specifically, in the market for LPG. Currently, he explained, the group is deliver- ing LPG to 36 Nigerian companies for local distribution.
Finding additional domestic customers will allow NLNG to support the Nigerian govern- ment’s effort to make better use of the country’s natural gas reserves, he added.
Representatives of the consortium indicated last month that NLNG intended to adapt its business strategy in light of recent developments
– namely, the demand destruction and bear markets that have followed the coronavirus (COVID-19) outbreak and the Saudi-Russia oil price war. They told Punch that the pandemic had changed the outlook for all businesses, including LNG suppliers.
“NLNG continues to closely monitor the global impact of COVID-19 and adapt as appro- priate to meet our contractual obligations and achieve resilience,” they were quoted as saying by the newspaper.
The NLNG consortium comprises four shareholders: Nigeria National Petroleum Corp. (NNPC), with 49%; Royal Dutch Shell (UK-Netherlands), with 25.6%; Total, with 15%, and Eni, with 10.4%. The group began operat- ing in 1989 and has already built six production trains at its gas liquefaction plant on Bonny Island.
Earlier this year, NLNG made a final invest- ment decision (FID) on the construction of a seventh production train. When complete, Train 7 will raise the facility’s production capacity from its current level of 22.5mn tonnes per year to 30mn tpy.™
AMERICAS
Shell, Pieridae to try licence transfers again
PROJECTS & COMPANIES
These assets in the Alberta Foothills are expected to provide
the anchor production for Pieridae’s planned Goldboro LNG terminal.
SHELL Canada – a division of Royal Dutch Shell – and Pieridae Energy are set to engage in a sec- ond attempt to transfer licences after the first was blocked by the Alberta Energy Regulator (AER).
The regulator said in its May 14 decision that Pieridae’s attempt to buy the assets – which include sour gas wells, pipelines and other facil- ities – from Shell went against the intent of envi- ronmental laws. Indeed, this was seen as a test case of the AER’s position on clean-up costs for energy facilities as it tries to avoid having these costs fall on the taxpayer. The AER noted in its decision that the deal would have split the lia- bility for cleaning up the sites, and argued that responsibility for clean-up should remain with Shell.
Pieridae attempted to sound an upbeat note on the way forward in a May 15 statement that led with the phrase: “Pieridae is confident a solu- tion will be found.”
Pieridae’s CEO, Alfred Sorensen, said that both his company and Shell were evaluating their options and would continue to seek clarity from the AER on how to proceed.
“The decision has nothing to do with Pieri- dae’s financial position nor its ability to clean up certain assets,” he said. “The issue for denial was the fact that there is no precedent for splitting a licence or no ability under the current legislation to do so. This issue only applies to the Waterton and Jumping Pound gas plants.”
Shell Canada’s president, Michael Crothers, said separately that Shell stood by its plans for the assets. The terms of the sale would have left Shell responsible for existing contamina- tion at the assets and Pieridae liable for future problems.
These assets in the Alberta Foothills are expected to provide the anchor production for Pieridae’s planned Goldboro LNG terminal in Nova Scotia. The licences in question cover 284 wells, 66 facilities and 82 pipelines.
Pieridae delayed a final investment decision (FID) on Goldboro in April on deteriorating market conditions. Meanwhile, the transaction with Shell has closed and Pieridae is the owner and operator of the assets despite the regulatory hurdle it has now run into.™
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