Page 7 - GLNG Week 34 2021
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GLNG AFRICA GLNG
NLNG is reportedly having difficulty
upholding supply commitments
PERFORMANCE THE Nigeria LNG (NLNG) consortium is If appropriate actions are not taken, he added,
reportedly struggling to meet its commitments the number of affected cargoes could rise to 50
to customers. by the end of the year and customers may start
Sources told the Nation earlier this week that looking to other suppliers outside Nigeria.
NLNG had experienced difficulties with more Meanwhile, a market source pointed out that
than 20 LNG cargoes within the last six months. NLNG’s problems were “causing major supply
The shipments appear to have been delayed or disruptions and a very high level of operational
otherwise disrupted as a result of NLNG’s ina- inconsistencies, leading to unnecessary demur-
bility to secure enough feedstock from all of its rage exposures and penalties.” He added: “If
foreign shareholders, they alleged. things continue in this perception and complex-
The sources pointed to Eni (Italy), a minority ities set in, it won’t be surprising to see offtak-
shareholder in NLNG, as the primary source of ers demand performance guarantees for future
the problem. They told the Nigerian newspaper lifting.”
that the Italian major was only delivering about The market source went on to say that this
50% of the promised volume of gas to the con- development might hinder NLNG’s expan-
sortium’s liquefaction plant on Bonny Island. sion plans – namely, the Train 7 project. Dis- The trains cannot
This compares unfavourably with Royal Dutch ruptions on this front “will be disastrous [for]
Shell (UK/Netherlands) and TotalEnergies, credit ratings and could impact on future maximise or
which are currently supplying about 90% of the financial syndication for LNG project expan-
contracted volume, they said. sion,” he said. optimise LNG
One of the sources noted that NLNG’s six The NLNG consortium is the operator of a
existing production trains were capable of oper- gas liquefaction plant on Bonny Island. The facil- production unless
ating at nearly 90% of their nameplate capacity. ity has six operational production trains capable they receive
The trains cannot maximise or optimise LNG of turning out a total of 22.5mn tonnes per year
production unless they receive enough gas, and of LNG, and its capacity is set to rise to 30mn enough gas.
as a result, they suffer the consequences when tpy as a result of the Train 7 project. This scheme
the consortium’s foreign shareholders do not envisions the construction of a seventh produc-
uphold their commitments, he said. tion train that can turn out 4.2mn tpy, as well as
The source urged Eni and the other inter- the debottlenecking of existing trains, which will
national oil companies (IOCs) that hold stakes add another 3.4mn tpy of capacity.
in NLNG to make concessions for the sake of Equity in the consortium is divided between
reducing the “performance reputational risk” state-owned Nigerian National Petroleum
that the group now faces in international mar- Corp. (NNPC), with 49%; Royal Dutch Shell
kets. He did not recommend any particular (UK/Netherlands), with 25.6%; TotalEnergies
solutions, but he said that the group might soon (France), with 15%, and Eni (Italy), with 10.4%.
have no choice but to acquire LNG from third- The partners began production in 1999 and
party vendors in order to meet their supply broke ground on the Train 7 project in June of
commitments. this year.
Week 34 27•August•2021 www. NEWSBASE .com P7
