BusinessDay

Minister says work on NLNG Train 7 starts May, raising prospects of hitting 30m mtpa

Work on the multibillion-dollar Nigeria Liquefied Natural Gas (NLNG) Train 7 is expected to commence by May this year, according to Timipre Sylva, minister of State for Petroleum Resources.

The minister regretted that the outbreak of Covid-19 has caused delay in starting the project, saying engineers who should have been working on the project could not move out of their various countries for most parts of last year as the whole of Europe was completely locked down.

He said he was sure that serious work would commence on the project by May this year.

Starting work on the NLNG Train 7 project would allow for increasing the capacity of NLNG’s six-train plant from the extant 22 million tons per annum (MTPA) to 30m MTPA, and will help create “over 12,000 jobs during the peak of construction”, just as trade and commercial activities within the Niger Delta region will equally receive a boost as a result.

The Nigerian National Petroleum Corporation (NNPC), Shell, Total, and ENI signed the final investment decision (FID) to give the go-ahead for the construction of Train 7 of the NLNG project in December 2019.

Sylva, who spoke during NewsNight, a Channels Television programme, also spoke on variety of issues germane to development of the oil and gas industry. For instance, he said Nigeria’s crude oil reserves at the current level can actually support 4 million barrels per day production and there is still good headroom to improve.

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Commenting further on gas development in the country, he said one of the things that got the government thinking in that direction was because it was thought that if the government was going to deregulate the downstream sector of the petroleum industry, it means pump prices would rise a little bit.

“It means we have to bring an alternative to petrol. We believe that gas is a cleaner fuel and a more efficient one. We have a lot of gas in Nigeria, but unfortunately, we have not developed it,” Sylva said.

“There is a lot of deforestation with logs of wood being used for cooking, so we thought it was better for us to introduce gas as cooking fuel and some progress has been made. We believe on the whole this is the way to go, especially when the world is looking for a cleaner fuel. We want to harness what we have so that we can catch up with the rest of the world,” he said.

On the marginal field licensing bid round, he said the exercise was to actually support the participation of local people to build local capacity, adding that Nigeria is within a profitable region for the international oil companies despite their lack of investments in the last few years in the oil and gas because of the issue that has to do with Petroleum Industry Bill (PIB).

“The IOCs may be complaining but they have been in the country for a long period and they understand the territory and they know that this is the territory to be,” Sylva said.

As regards the status of PIB, he said, “In this industry, certainty is everything. If investors are not certain, they will not invest; there is need for us to bring some certainty into the industry. We have been in the process of passing the bill for a long time now, for 20 years,” he said.

The minister said right now there is a conscious effort between the executive and legislators to pass the PIB.

“It is at the committee level of both houses of the National Assembly presently. We are well much in the process of passing it,” he said, adding that “there would be no political interference”.

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