NLNG strikes sales contract deal with Total for 10 years
Nigeria LNG Limited (NLNG) and Total Gas & Power (TGP) on Wednesday signed a LNG Sale and Purchase Agreement (SPA) for some of the remarketed volumes from NLNG’s Trains 1, 2 and 3.
The agreement is for the supply of 1.5mtpa for a 10- year-term on a delivered Ex-ship and Free on Board (FOB) basis.
The SPA with TGP advances the plans by NLNG to remarket volumes from three trains. The SPA is expected to boost the company’s global presence and market reach, in line with its corporate vision of being a “global LNG company, helping to build a better Nigeria”.
Tony Attah, managing director and chief executive officer of NLNG, signed on behalf of the company while Thomas Maurisse, Senior Vice President LNG, signed for TGP.
He said the agreement was in line with NLNG’s drive to continue to deliver LNG globally in consolidation of its position as one of the top-ranking LNG suppliers in the world.
The shareholders of the company, Nigerian National Petroleum Corporation (NNPC), Shell, Total, and ENI in late December last year signed the final investment decision (FID) to give the go-ahead for the construction of Train 7 of the NLNG project.
The FID was finally taken on the commencement of the project that will expand the plant’s production capacity by 35 per cent and boost Nigeria’s competitiveness in the global LNG market.
“It will allow the expansion to increase the capacity of NLNG’s six-train plant from the extant 22 million tonnes per annum (MTPA) to 30 MTPA,” Tony Attah, managing director/CEO of NLNG, said during the signing ceremony.
Train 7 is the crux of a growth agenda, which will ensure the Company’s position as the 5th major supplier of global LNG is maintained, increasing value to its shareholders and other stakeholders, as well as further reducing the gas that would otherwise have been flared, in fulfilment of its vision of ‘being a global company, helping to build a better Nigeria.
With the award of contracts for the engineering, procurement and construction activities to follow the closure of the bank and Export Credit Agency (ECA) financing, and the finalization of some key supporting commercial agreements is expected in early 2020.
The actualization of the Train 7 Project comes as NLNG celebrates 30 years of its incorporation and 20 years of safe and reliable operations since exporting its first LNG cargo in 1999.
Also, the project will help create over 12, 000 jobs, which will be created during the peak of construction, with trade and commercial activities within the Niger Delta region equally receiving a boost as a result.
The Project will also support the development of local engineering and fabrication capacity in the country. Other opportunities for local content include procurement, logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, and many more.
The FID marks a great day for Nigeria as all the partners in the project have resolved to proceed with a project that will ultimately deliver at least $20 billion of net revenue per annum for the federation and create at 12,000 direct and 40,000 indirect jobs to Nigerians.
The significance of the FID is that there is renewed confidence by international investors, particularly the partners in the project, which have been in the country for long, to still agree to bring money back into this economy to move Nigeria and our relationship forward.