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NNPC, Chinese banks seal financing deal
NIGERIA
NIGERIAN National Petroleum Corp. (NNPC) is close to wrapping up a deal with Chinese lend- ers on a credit that will help cover the cost of the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline project.
State-owned NNPC reported earlier this week that it expected to finalise the $2.5bn loan agreement with the Bank of China (BoC) and the Industrial and Commercial Bank of China (ICBC) before the start of the second quarter.
Sinosure, the Chinese government’s export credit agency, will act as guarantor for 85% of total project costs, it said.
Nigerian officials began negotiating the deal with representatives of the Chinese banks in late 2018, during the most recent summit on Sino-African co-operation. They ended up securing a loan equivalent to nearly 90% of the $2.8bn price tag for the AKK pipeline.
The AKK link will follow a 614-km north- ward route from the left bank of the Niger River
in Kogi State to the capital city of Kano State.
It is meant to serve as the first section of the Trans-Nigeria Gas Pipeline (TNGP) and will deliver gas to domestic thermal power plants (TPPs), NNPC. As a result, it will help bring Nigeria’s total generating capacity above the 10,000-MW mark and make electricity available to a larger share of the population, the company
said.
According to NNPC, the pipeline will carry
gas from seven development projects that are already underway. It will have a design capacity of 3.5bn cubic feet (99.11mn cubic metres) per day, or about 36.175bn cubic metres per year), and initial throughput will amount to 2 bcf per day (56.64 mcm per day, or around 20.67 bcm per year). NNPC hopes to begin building the AKK line before the end of 2020. It has chosen a consortium formed by Chinese and local com- panies to act as its contractor for work on the pipe and compressor stations.™
NLNG in 10-year supply deals with Total, Eni
NIGERIA
THE Nigeria LNG (NLNG) consortium has concluded 10-year supply deals with two inter- national majors within the last week. The buyers are Eni (Italy) and Total (France), both of which are members of the group.
The first of the two was the sales and pur- chase agreement (SPA) signed between NLNG and Total last week. This document provides for the delivery of 1.5mn tonnes per year of LNG to Total Gas & Power, a subsidiary of the French company. The LNG will consist of remarketed volumes from Trains 1, 2 and 3 of the group’s liq- uefaction plant on Bonny Island, NLNG noted in a statement.
The second agreement is similar to the first, as it calls for the delivery of 1.5mn tpy of remar- keted LNG from Trains 1, 2 and 3 over a period of 10 years. This document was signed between NLNG and Nigerian Agip Oil Co. (NAOC), a subsidiary of Eni, the consortium said in a sepa- rate statement on January 27.
This is not Eni’s first contract with NLNG.
In December 2019, the Italian company signed another SPA that will see it take delivery of 1.1mn tpy of LNG from the group.
The statements did not reveal when NLNG intended to begin deliveries to Total and Eni under the new contracts. The group has said previously that it intends to make its first ship- ments of remarketed LNG to Vitol in October
2021. (The global commodities traders signed its own SPA with NLNG in December 2019 and will receive 500,000 tpy.) Last week, NLNG said in its statement that the supply deal with Total would support its “drive to continue to deliver LNG globally in consolidation of its position as one of the top-ranking LNG suppliers in the world.” Eyono Fatayi-Williams, NLNG’s exter- nal relations manager, spoke similarly, saying that the contract was sure to “boost the compa- ny’s global presence and market reach.” She also highlighted the consortium’s efforts to secure its position as “a global LNG company helping to build a better Nigeria.” The consortium’s exist- ing contracts with Total, Naturgy (Spain), Galp (Portugal) and Botas (Turkey) for 2.67mn tpy of LNG from Trains 1, 2 and 3 are due to expire in 2020 and 2021. As a result, the group has been working to remarket production volumes from the three trains.
NLNG has four shareholders. Nigeria National Petroleum Corp. (NNPC) has 49%, and the remaining 51% is split between Royal Dutch Shell (UK-Netherlands), Total and Eni.
The partners recently made a final investment decision (FID) on the construction of a seventh production train at the Bonny Island plant.
When complete, Train 7 will raise the facili- ty’s production capacity from its current level of 22.5mn tpy to 30mn tpy™
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w w w. N E W S B A S E . c o m Week 04 30•January•2020