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$17bn NLNG Train 7 project fact sheet at a glance

The execution of the Nigeria Liquefied Natural Gas (NLNG) Train 7 project will create over 12, 000 direct and indirect jobs for Nigerians, this  will be created during the peak of construction. Trade and commercial activities within the Niger Delta region will equally receive a boost.

The project will also support the development of local engineering and fabrication capacity in the country. Other opportunities for local content are procurement, logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage and many more.

The Managing Director of NLNG, Engr. Tony Attah  stated that the project upon completion would support the Federal Government’s drive to diversify its revenue portfolio and generate more revenue from Nigeria’s verified gas reserves of about 200 trillion cubic feet.

The firm added that the construction period after FID would last approximately five years with first LNG rundown expected in 2024.

NLNG TRAIN 7

Nigeria LNG Limited (NLNG) has taken the Final Investment Decision (FID) on its Train 7 Project –

which will increase production capacity at its plant on Bonny Island, Finima, Rivers State from 22

million metric tonnes to 30 million metric tonnes per annum.

The FID was taken with the support of all the company’s Shareholders – Nigerian National

Petroleum Corporation (49%); Shell Gas B.V. (25.6%); Total Gaz Electricite Holdings France (15%) and Eni International N.A. N.V. S.ar.l (10.4%).

NLNG remains one of Nigeria’s best investments to-date. Circa US$ 36 billion has been paid as dividends to shareholders over the years.

NIGERIA LNG’S CONTRIBUTIONS TO NIGERIA’S ECONOMY

v             Nigeria LNG Limited has generated significant revenue for the nation and

contributed to the reduction in environmental hazards arising from gas flaring.

v             It has converted about 191.5bcm (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% when it commenced operations to less than 20% currently.

v             NLNG has two subsidiaries, Bonny Gas Transport Limited (BGT) and NLNG Ship Management Limited (NSML). NLNG has 23 vessels in its fleet, 13 of which are owned by its subsidiary, BGT. NSML, initially set up as a manning outfit in 2010, metamorphosed into an ‘international maritime services company, providing the following world-class maritime services, namely, vessel management, crew management and administration, terminal management and maritime training, projects and consultancy.

v             Today, NSML has achieved over 83% of its Nigerianisation target and is on course to meet the 100% Nigerianisation target by 2022. As at December 2019, the company has in its employment 661 competent and professional employees (297 Officers, 329 Ratings and 35 shore-based personnel).

IMMEDIATE GAINS

v             Over 12,000 direct jobs during construction phase.

v             Foreign Direct Investment for Nigeria, Upstream and other associated projects coming on stream.

v             Stimulation of the local economy.

COST OF TRAIN 7 PROJECT

v             The cost will be established after the Engineering, Procurement and Construction (EPC) Contracts signing, which is expected to follow FID.

– In addition, personal income tax of over NGN 7 billion yearly accrues to the Rivers State Government through the Company’s PAYE scheme. Among other things, NLNG also pays about NGN 140 million and NGN 2.5 million annually in tenement rates to Bonny and Port-Harcourt Area Local Governments respectively.

OUR COMMITMENT TO NIGERIAN CONTENT DEVELOPMENT

Working closely with the Nigerian Content Development and Monitoring Board (NCDMB), this project is committed to:

v             Give first consideration to Nigerian indigenous service providers and manufacturers of goods without compromise to business ethics, HSE and quality at a competitive price. Our focus is to achieve:

v             Retention of in-country expertise through training, technology transfer, patronizing and developing local capacity of Small and Medium Scale Enterprises.

v             Investment opportunities in manufacturing and capacity development.

v             Employment opportunities for Nigerian service providers and manufacturers.

v             Massive job opportunities especially in the construction phase.

v             55% of the Engineering activities will be carried out in Nigeria.

v             55% of all procurement for execution of the project will be done by Nigerian vendors.

v             100% of the installations and construction will happen in Nigeria.

v             DATE FOR FINAL INVESTMENT DECISION (FID) FOR TRAIN 7

v             FID was taken on Friday 27th December, 2019 in Abuja with all the stakeholders involved.

v             In real terms, NLNG assets and cumulative earnings have surpassed the assets and earnings of the over 169 companies listed on the 59-year old Nigerian Stock Exchange and has exceeded the benchmark set for Fortune 500 companies.

v             Significantly, over 70% of NLNG’s profit goes to Nigeria, via NNPC through dividends, and Federal Inland Revenue Service (FIRS), through Company Income Tax. Other applicable taxes include VAT and Education Tax. NNPC also gets 55-60 per cent of the feed gas revenues through its participating interest in the upstream JVs

DURATION OF THE PROJECT

v             Train 7 is expected to be completed within five years from start of construction.

ENVIRONMENTAL PERFORMANCE

v             NLNG is the arrowhead of the Federal Government’s aspiration to eliminate gas flaring, monetise hitherto flared gas and diversify Nigeria’s crude oil-based economy.

v             To date, NLNG has helped to reduce previously flared natural gas from about 60% flare status when the company commenced operations in 1999 to less than 20% today, thereby improving Nigeria’s gas flaring profile and the environment.

v             Train 7 will contribute to further reduction of gas flaring in the country.

v             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 the applicable statutory requirements of Nigeria, International standards and standards subscribed to by our shareholders.

v             The ESHIA outlines plans to mitigate any impact of Train 7 on its host community, which

NLNG is fully committed to.

ENGINEERING, PROCUREMENT AND CONSTRUCTION

v             The Engineering, Procurement and Construction (EPC) phase is expected to commence after the FID.

v             Letter of Intent for EPC Contracts was issued to SCD JV Consortium in September 2019.

v             SCD JV Consortium comprises Saipem of Italy, Japan’s Chiyoda and Daewoo of South Korea.

v             SCD JV will be constructing one complete train and one common liquefaction unit with a total capacity of approximately 8 MTPA, as well as associated utilities and infrastructure.

FINANCING

v             The project will be financed partly from NLNG Balance Sheet.

v             It will also be partly financed through third party corporate

v             loans from Export Credit Agencies and a number of key International and local banks. Talks to this effect are ongoing.

v             Sumitomo Mitsui Banking Corp. (SMBC) and Guaranty Trust Bank of Nigeria were appointed as financial advisers on transactions for the project.

v             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.

SOCIAL PERFORMANCE

v             Job creation for residents in our host community.

v             Boost of trade and commercial activities with the influx of workers from around the country.

v             Increased availability and affordability of LPG (cooking gas), 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.

v             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. 100,000 people are believed to die annually from firewood smoke making it the third highest killer in Nigeria after malaria (225,000) and HIV (192,000). 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.

NLNG REMAINS COMMITTED TO DEEPENING THE LPG MARKET

ARE THERE ANY IMPLICATIONS ON NIGERIA’S ABILITY TO IMPROVE POWER SECTOR OR BUILD ITS DOMESTIC GAS MARKET?

v             Nigeria boasts of over 200 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.

v             The country’s Gas Master Plan enables export and robust utilisation of gas for domestic purposes. NLNG is a key player in helping to realise the country’s goals on utilisation of its gas resources.

WHAT NEXT…

NLNG’s sustained operations on delivery of Train 7 will continue to assure Nigeria of:

  • Significant revenue generation
  • Reduction in gas flaring
  • Sustained domestic LPG supply
  • Viable LNG supply for domestic need
  • Job opportunities & local capacity development
  • Fulfillment of our vision of being a global LNG Company Helping to build a better Nigeria

 

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