NNPC, NLNG seal $2.5bn gas supply deal

NNPC, NLNG seal $2.5bn gas supply deal

As the time for signing of the final investment decision (FID) for the Nigeria Liquefied Natural Gas (NLNG) Train 7 draws near, the Nigerian National Petroleum Corporation (NNPC) has challenged shareholders to work very quickly towards expanding the production capacity of the company beyond Train 7 to take advantage of developments in the global LNG market.

The FID on Train 7 is expected to be signed by the end of this October, after 12 years of dilly dally, while a letter of intent for the engineering, procurement, and construction (EPC) contract with SCD JV Consortium to build a seventh train at the plant was signed.

Mele Kyari, group managing director of NNPC, gave the charge weekend in Abuja, during the signing ceremony of a $2.5-billion pre-payment agreement between NNPC and NLNG for upstream gas development projects to supply gas to NLNG Trains 1 – 6. The signing of the gas deal was to ensure that there was constant gas supply to the plants.

Speaking on the significance of the agreement, Kyari said it would help to resolve the issues around gas supply to Trains 1 – 6, stressing that there was the need to fast-track action on the process of bringing more trains on stream.

“Here at NNPC, we are thinking beyond Train 7,” Kyari said, noting that though NLNG had been a huge success as a company, it must go beyond its current achievements and initiate other viable projects capable of generating a better return on investment.

“Actually, our thinking should be on what else we can do or what other projects we can work on as quickly as possible to take advantage of the enormous potential in-country. There is also a need for us to take advantage of what is happening in the global market and do things very differently. There are opportunities there and our company must move into those locations and we must move fast,” he said.

The NNPC helmsman said the pre-payment gas supply agreement was a milestone that aligned with the Federal Government’s aspirations of monetising the nation’s enormous gas resources, protecting the Federation’s investment in the NLNG, ensuring full capacity utilisation (22mtpa LNG and 5mtpa NGLs) of Trains 1-6 plants, generating employment, and providing new vistas of growth opportunities in the nation’s LNG sector.

Earlier in his address, Tony Attah, managing director of NLNG, noted that the signing of the gas supply pre-payment agreement was a significant step towards ensuring the company’s business sustainability and competitiveness.

He called for support to ensure that the Final Investment Decision on the Train 7 Project was taken this year without fail, adding that the project was no longer an ambitious one in the light of developments in the global LNG market.

The highpoint of the occasion was the signing of the gas supply pre-payment agreement witnessed by the country chairman of Shell Companies in Nigeria, Osagie Okunbor, and representatives of Total, Eni/NAOC, among others.