Shell Gas B.V., a subsidiary of Royal Dutch Shell plc, has announced that all conditions for its Final Investment Decision (FID) on a new LNG processing unit at Nigeria LNG (NLNG) have now been met.
These conditions included formal commitment from the organisations providing financing for the project. Subsequent to the FID, NLNG has announced awards of engineering, procurement and construction (EPC) contracts.
Once operational, the new unit, known as Train 7, will add around 8 million tonnes per annum (mtpa) of capacity to the Bonny Island facility, taking the total to around 30 mtpa.
Currently operating six processing units, or trains, the decision to build a seventh will bolster NLNG’s contribution to the development of the country through generating revenues for the Nigerian government and delivering key natural gas products for domestic use.
NLNG is a joint venture owned by the Nigerian National Petroleum Corporation (NNPC – 49percent), Shell (25.6percent), Total (15percent) and ENI (10.4percent ). All shareholders have supported the EPC awards and construction schedules will be finalised once the situation with COVID-19 has stabilised.
“While remaining mindful of prevailing macro-economic challenges, Shell continues to see NLNG as a great resource that can deliver value to the people of Nigeria and investors alike. This decision is consistent with our long-term strategy and our disciplined approach to capital investment,” said Maarten Wetselaar, Shell’s Integrated Gas and New Energies Director.
“Natural gas is a core component of our strategy to provide more and cleaner energy solutions. With global LNG demand expected to double by 2040, the expansion of the NLNG Bonny Island facility is crucial in helping Shell meet the world’s growing energy needs.”
‘‘We are happy with the progress NLNG has made over the years and its enormous contributions to the Nigerian economy. The EPC awards for Train 7 is good news for Nigeria with the potential to bring more export revenues, unlock new projects, and attract foreign direct investments, in addition to transforming the economy of the Niger Delta and Nigeria as whole,” said Osagie Okunbor, Country Chair, Shell Companies in Nigeria and Managing Director, The Shell Petroleum Development Company of Nigeria Ltd.
“Shell is positioned to support NLNG’s expansion by working with our government and other partners to develop new gas resources to sustain this growth and enhance both domestic and export gas supplies.”
The new LNG processing unit will be funded by NLNG without shareholder loans or shareholder equity requirements. The project cost is therefore not reported as part of Shell’s overall capital expenditure.
Just this Wednesday Nigeria LNG Limited (NLNG) has signed the Engineering, Procurement and Construction (EPC) Contracts for its Train 7 Project with the SCD JV Consortium, comprising affiliates of Saipem, Chiyoda and Daewoo.
The execution of the EPC Contracts now triggers the commencement of the Detail Design and Construction phase of the Project expected to increase the capacity of NLNG’s current six-train plant by 35percent from the extant 22 Million Tonnes Per Annum (MTPA) to 30 MTPA.
