• Pays Fed Govt $33b
After 10 years of delay and $360 million expenditure, the Nigeria Liquefied Natural Gas Limited (NLNG) has shelved the idea of building a single big train for liquefaction of natural gas for export.
Its initial plan was to build a mega Train 7 with 8.7 million tonnes per annum capacity but after several reviews, it settled to do two smaller trains instead, now Trains 7 and 8 with 4.3 million tonnes per annum capacity each. It expects to take Final Investment Decision (FID) on the two trains before end of 2019.
Its Managing Director/Chief Executive Officer, Babs Omotowa stated this during the presentation of 2016 facts and figures on NLNG in Lagos.
He said the decision to build smaller trains is financially rewarding as it is cheaper and easier to manage.
Omotowa said: “Previously we were looking at Train 7 as a mega project, which the Qataris built. It was 8.7 million tonnes per annum train.
“The current set of trains we have is the same as the previous one, 3.3 million tonnes to 4.3 million tonnes per annum sizes. But the initial Train 7 could have been one big train of 8.7 million tonnes per annum. After a lot of review, we saw we are better to replicate what we have, and not to over-complicate our problems. So we are just doing a replica of Train 6, which is 4.3 million tonnes per annum, so when we do two of that, it will give us 8.6 million tonnes per annum, but it will be easier to maintain, the same technologically basically, and all those factors.
“So we are working the two trains together. And when we come to take the FID, we will be able to decide either to build only one or the two together. Remember we built Trains 1&2 together.”
He stated that the stakeholders intend to take the FID within President Muhammadu Buhari’s first tenure. “The FID will be during this administration. Currently we are doing the Basis for Design (BFD); from there, we move to Front End Engineering Design (FEED); from there we go into the Engineering, Procurement and Construction (EPC) stage, which is the tender for the real packages and it is only when we are through with these that we will take the FID,” he added.
Omotowa said the Company had since inception in 1999, generated $90 billion, paid $33 billion as dividends to the Federal Government within the same period, and paid $21 billion for Joint Venture gas purchases. He noted that it currently contributes four per cent to the gross domestic product (GDP).
He also said the country needed to spend $20billion annually in the next 10 years before it can optimally explore its huge gas reserves, adding that the country has not been able to fully explore its huge gas reserves due to the delay in the passage of the Petroleum Industry Bill (PIB), and unwillingness of investors to invest in gas, as well as financial and infrastructural bottlenecks.