As work continues on the seventh train of the Nigeria LNG Limited’s gas-liquefication plant, Bonny Island and other beneficiaries are in for exciting times, writes OLUKOREDE YISHAU

For years, the seventh train of the Nigeria LNG Limited plant in Finima, Bonny Island was expected to take off. The people of the ancient Island looked forward to exciting times as witnessed during the construction of the first to the sith train. Now, the wait is over and residents are benefiting from job creation, a boost in trade and commercial activities with the influx of workers from around the country. Over 12,000 jobs are expected to be created during the construction phase. And it is going to last for five years.

Aside the seventh train, the NLNG plans to construct a new Workers Village on about 31 hectares of land and is considering an upgraded Joint Venture Village to accommodate construction workers. These will need hands and Bonny Island indigenes will benefit.

The company took the Final Investment Decision (FID) for the project in December 2019, signed the Engineering, Procurement, and Construction (EPC) contracts with the SCD JV Consortium, comprising affiliates of Saipem, Chiyoda, and Daewoo, on May 13, 2020 and some weeks back, President Muhammadu Buhari inaugurated the train, which is expected to increase NLNG’s current six-train plant capacity by about 35 per cent from the existing 22 Million Tonnes Per Annum (MTPA) to 30 MTPA.

Buhari, who flagged the project virtually, said the groundbreaking was an important milestone in the country’s oil and gas industry history, adding that “the story of Nigeria LNG is one that I have been so passionately associated with during the formative years of the NLNG project. It has transformed from a project over the years to a very successful company.” NLNG remains one of Nigeria’s best investments to date. $18 billion has been paid as dividends to shareholders over the years.

The president went further: “This groundbreaking ceremony to herald the Train 7 project construction has afforded me the opportunity to congratulate NLNG and its Company’s shareholders – NNPC, Shell, Total, and Eni – for proving that a Nigerian company can operate a world-class business safely, profitably, and responsibly. Clearly, you have set the stage upon which Nigeria’s vast gas resources will continue to grow well into the future.”

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“I am proud that NLNG, as the pioneer LNG company in Nigeria, has conscientiously proven the viability of the gas sector over the years, currently contributing about one percent to our country’s GDP. NLNG has generated $114 billion in revenues over the years, paid $9 billion in taxes; $18 billion in dividends to the Federal Government and $15 billion in feed gas purchase. These are commendable accomplishments by the company’s 100 percent Nigerian Management Team.

“With this level of performance, I can only hope that the company continues to grow, starting with this Train 7 project, but also positioning Nigeria to thrive through the energy transition. I hereby urge the Board of Directors, Management and Staff of Nigeria LNG, the Host Communities, the Rivers State government and Agencies of the Federal Government to continue to collaborate to ensure completion and eventual commissioning of the Train 7 project safely and on time, so that Train 8 can then start.”

Rivers State Nyesom Wike, who was represented by his deputy, Dr. Ipalibo Banigo, applauded the shareholders, NLNG’s Board of Directors, and the company’s management for keeping the Train 7 dream alive. He said the state government considered the project as a key economic enabler and committed to supporting both the project and the company.

Minister of State for Petroleum Resources Chief Sylva said the Train 7 would contribute to maintaining the country’s status as a gas exporting nation. He said: “Nigeria has more gas reserves than crude oil, and we have much to gain from sustaining our LNG exports to a market that has a growing demand for the commodity as the preferred fuel for industrialisation and power generation.”

NNPC Group Managing Director Mele Kyari commended the Federal Government for supporting the project and called for stakeholders’ support for the project. He added that support for NLNG would lead to immense benefits to Nigerians.

NLNG Managing Director Tony Attah said the benefits of gas to the country would increase on the back of the Train 7 project. He added that Train 7 would stimulate the inflow of more than $10billion Foreign Direct Investment into Nigeria as part of the project scope; create more than12,000 direct jobs and additional 40,000 indirect construction jobs; and develop Nigerian local capacity and businesses. He added that the increase in volume supply to the global market as a result of Train 7 would keep NLNG and the country on top of the suppliers’ chart as world LNG demand grows.

Reduction in gas flaring     

Aside from the benefits associated with job creation, it will also help the country reduce gas flaring. So far, the NLNG has converted about 193.6bcm (billion standard cubic metres) or 6.8Tcf (trillion cubic feet) of Associated Gas (AG) as Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs), thus reducing gas flaring by upstream companies from over 60 per cent when it commenced operations to less than 12 per cent now.

Giving priority to Nigerians

The NLNG is also working closely with the Nigerian Content Development and Monitoring Board (NCDMB) to give first consideration to Nigerian indigenous service providers and manufacturers of goods without compromise to business ethics, safety and quality at a competitive price. Through this, it aims to achieve the retention of in-country expertise through training, technology transfer, patronising and developing local capacity of Small and Medium Scale Enterprises.

Engineers will also have a swell time as 55 per cent of the engineering activities are being carried out in Nigeria. Fifty-five per cent of all procurement for execution of the project are also being done by Nigerian vendors and 100 per cent of the installations and construction are to be done in Nigeria.

The project will also increase the availability and affordability of cooking gas, which is a cleaner and safer fuel for cooking.

“LPG clearly has environmental advantages, huge potential for forex savings in lieu of kerosene importation and more importantly, the crucial impact it can have in helping to save lives. A recent World Health Organisation (WHO) report revealed that about 4 million people die annually from hazardous cooking practices, using polluting stoves, paired with solid fuels and kerosene. Thousands of people are believed to die annually from firewood smoke making it the third highest killer in Nigeria after malaria and HIV. Painfully, this population is mainly women (our mothers, our wives, our sisters) and children who are only doing their best just to put food on the table. This is not acceptable to NLNG,” said the company in a statement.

Power generation

The project is also expected to boost Nigeria’s ability to improve the power sector and build the domestic gas market. The country has 206 trillion cubic feet (tcf) of proven gas reserves, and an estimated additional 600 tcf of potential reserves. There are more than enough natural gas reserves for both domestic power generation and for export.

The Train 7 will help to make Domestic LNG available for power. NLNG has signed 10-year LNG Sales and Purchase Agreements (SPAs) with three offtakers for the domestic supply of LNG in country.

The company will supply 1.1 Million Tons Per Annum (MTPA) of LNG on DES basis to Asiko Power Limited, Bridport Energy Limited and Gas-Plus Synergy Limited. The SPAs will facilitate the project execution and infrastructural development by offtakers to aid LNG delivery into the domestic market.

“We are also looking to expand the LPG value chain by increasing our supply to the domestic market, guaranteeing LPG supply and enhancing its affordability, and enabling the development of a value network for a sustainable ecosystem,” Attah said.

Safety

An Environmental, Social and Health Impact Assessment (ESHIA) has been approved by the Federal Ministry of Environment.

“The ESHIA demonstrates that Train 7 Project fully complies with standards subscribed to by our shareholders as well as the applicable statutory requirements in Nigeria and international standards. NLNG is fully committed to the ESHIA which outlines plans to mitigate any impact of Train 7 on its host community. As part of the projects considered for the mitigation of the impact of workers influx into Bonny Island, NLNG plans to construct a new Workers Village on about 31 hectares of land and is considering an upgraded Joint Venture Village to accommodate construction workers,” the company said.