As Nigeria seeks alternative sources of energy to power its economy, President Muhammadu Buhari has pledged to focus more on harnessing the vast gas resources to transform the country into a major gas hub.
The President gave the pledge on Tuesday at the groundbreaking of the construction of Train 7 of the Nigeria Liquified Natural Gas (NLNG) project, in Bonny Island, Rivers State.
On the eve of 2020, partners to the project, led by the Nigerian National Petroleum Corporation (NNPC), and including Shell, Total, and ENI, signed the final investment decision (FID) to give the final go-ahead for the construction of Train 7 of the project, to expand the plant’s production capacity by 35 per cent and boost Nigeria’s competitiveness in the global LNG market.
On completion, the expanded plant would increase the capacity of NLNG’s six-train plant from the extant 22 million tonnes per annum (MTPA) to 30 MTPA.
At the groundbreaking ceremony on Tuesday, President Buhari said his administration would focus more on ”boosting the development of Nigeria’s abundant gas resources, strengthening the gas value chain, developing the much needed infrastructure and enhancing safe operations in the sector as contained in the National Gas Policy of 2017”.
The President who spoke virtually, said through the “Decade of Gas initiative” he launched recently, “Nigeria would be transformed not only into a major gas hub, but also an industrialised nation, with gas playing the key role as revenue earner, fuel for industries and necessary feed for petrochemicals and fertiliser plants. ”
Buhari said he was proud of the achievement by the NLNG as the pioneering LNG company in Nigeria, adding that the company “has proven the viability of the gas sector over the years.”
At the moment, he said gas has contributed about one percent to the country’s gross domestic product (GDP), with payment of dividends to the Federal Government and other shareholders without fail.
”NLNG has generated $114billion in revenues over the years, paid $9billion in taxes; $18billion in dividends to the Federal Government and $15billion in feed gas purchases.
“These are commendable accomplishments by the company’s 100 percent Nigerian Management Team,” he said.
With this level of performance, he said he could only hope the company continues to grow, starting with Train 7 project, but also positioning Nigeria to thrive through the energy transition period.
Urging the board of directors, management and staff of NLNG, the host communities, the Rivers State government and agencies to continue to collaborate to ensure the completion and eventual commissioning of the Train 7 project safely and in record time, to pave the way for Train 8.
With the flag off of Train 7, the President said he looked forward to the development and execution of more gas projects by the international oil companies (IOCs) and indigenous operators, as well as more operarional trains from the NLNG to harness the over 203 trillion cubic feet of proven gas reserves in the country.
This, he said, would open the opportunities to further unlock the country’s huge gas reserves estimated at more than 600 trillion cubic feet.
He congratulated the shareholders of NLNG, the Federal Ministry of Petroleum Resources, NNPC and indeed the Nigerian Content Development Monitoring Board (NCDMB) and other stakeholders for the collaboration which has culminated in the Train 7 project.
Minister of State for Petroleum Resources, Timipre Sylva, who performed the ground breaking ceremony on behalf of the President said the coming on stream of the NLNG has helped to cut down gas flaring from 65 percent to 12 percent in the last decade.
Sylva said the flares down was evidence the NLNG was a blessing to the nation, as it positively complemented crude oil exploration, by monetizing flared gas, yielding huge revenue for the nation and the investors.
Besides, he said the jobs created and the business opportunities realized since the inception of the NLNG operations in Bonny Island also summarizes the positive impact of its operation on both the company’s host communities and for Nigerians.
“Apart from the impactful social investment at the national and regional levels, the NLNG is therefore very reassuring to support the expansion of Nigeria LNG’s operation with the addition of one more train to its already thriving six-train plant making it a seven-train LNG complex,” he said.
The ground-breaking ceremony, the Minister said, “is a guarantee to every stakeholder of more dividends, in terms of further reduction in gas flaring, more revenue for the nation and the shareholders, more job opportunities, especially at the construction phase and more social investments for our society”.
Unlike the previous trains, he said the Nigerian Content level in the Train 7 project is at a record-breaking level of 55 percent for a midstream project covering engineering, fabrication, construction, manufacturing, logistics, and many other areas.
He said provisions have been made for the Community Content aspects of the Train-7 project as contained in the Nigerian Oil and Gas Industry Content Development (NOGICD) Act. “This is the first time that the NCDMB Community Content guidelines is being deployed on a mega project like this to ensure massive community participation”, Sylva said.
He said as Nigeria consolidates it’s status “as a gas exporting nation, the country is also rolling out policies to ramp up its domestic utilization of gas resources.
On 2020 as the Year of Gas, Sylva described it as a remarkable success, as the country shifted its focus on the years between 2021 and 2030 as the decade to deepen liquefied petroleum gas (LPG) and compressed natural gas (CNG) penetration across the country for domestic cooking, power generation, and auto-fuel for vehicles.
The coming on stream of NLNG Train 7, he noted, would enable the increment of LNG exports to markets with growing demands for LNG as a preferred fuel for industrialization and power generation.
He said similar templates to utilize LNG would be replicated in Nigeria to further hasten the country’s industrial development”.
The Group Managing Director (GMD) of NNPC, Mele Kyari said the coming on stream of NLNG Train 7 would create thousands of job opportunities and expand investments opportunities in the gas sector.
Kyari thanked President Buhari for his commitments in helping to resolve all uncertainties that delayed the final investment decision (FID) on the project.
“Today history is made. Mr President today is your day”, Kyari said, adding that the expectations of the President in respect of more LNG Trains was assured with the ground breaking of the Train 7 project.
With the realization of the multi billion naira NLNG Train 7, the NNPC boss said confidence of “our shareholders have been assured. We are confident that more investments will come”.
The Managing Director of NLNG, Tony Attah said the project would stimulate the inflow of more than $10 billion Foreign Direct Investment (FID) to Nigeria; create 12,000 direct and over 40,000 indirect jobs.
He said the decision to begin the Train 7 project was to improve on domestic gas utilization and investments in the sector in the country.
Attah said despite the uncertainties that surrounded the initial takeoff of the project its shareholders resolved to support the Federal Government through engagements,” stressing that the benefits of the project to the people would increase on the back of the Train 7 Project.
Attah said the development of Nigerian local capacity and businesses through the 100% in-country execution of Construction works, Fabrications and major procurements would also be enhanced with the coming onboard of Train 7 project.
He said the global energy demand was set to increase by more than 40 percent by year 2050, adding that the company believes the Train 7 project was timely as gas would continue to play a major role as the preferred energy of choice in the current and future energy mix”.
“Gas is readily available in Nigeria. It is cleaner and very affordable. Hence a massive opportunity for Nigeria. With over 206TCF of proven gas reserve and a potential additional 600TCF, I believe that Train 7 will be an inspiration and catalyst for Trains 8, 9, 10 and even to 15, in line with the recent declaration of “Decade of Gas” by Mr President,” he further stated.
The construction of Train 7 project would be financed partly from NLNG balance sheet and partly through a $3 billion multiple sourced deal with 30 reputable financial institutions.