Three top construction corporations, Saipem, Chiyoda and Daewoo, have emerged in a consortium to handle the Nigeria Liquefied Natural Gas (NLNG) Train 7 project estimated at $10 billion.
The three corporations have been involved in the construction of the NLNG right from the outset, but the company said the bidding was competitive and followed global best practices.
According to a statement from Eyono Fatai-Williams, general manager, external relations of NLNG, a letter of intent has already been issued to the consortium. This is said to be a significant step towards the final investment decision (FID) for Train 7 project.
The issuance of the letter of intent for the engineering, procurement and construction (EPC) contract of the project to the consortium made up of Saipem of Italy, Chiyoda of Japan and Daewoo of South Korea, is said to be coming on the heels of the Nigeria Content (NC) plan signed with Nigerian Content Development Monitoring Board (NCDMB) and the recent milestone of the 3 September, 2019, when NLNG submitted the summary outcome of the commercial bids evaluation for the Train 7 Project to NCDMB in line with the project certification and authorisation procedure.
According to NLNG, the letter of intent is one of the key milestones to be achieved on the road to FID by its shareholders. This expresses the intention to award the main EPC contract for the Train 7 project to the preferred bidder, saying that it marks another significant step towards the realisation of Train 7 and its attendant value to NLNG’s shareholders and for the benefit of the Nigerian economy.
The company also assured that the contracting process was transparent in full compliance with all applicable laws and good industry practices, stating that it will continue to operate its business in an open manner consistent with its core values of integrity and excellence.
The Train 7 project is expected to ramp up NLNG’s production capacity by 35 percent from 22 million tonnes per annum (MTPA) to around 30 million (TPA). The project will form part of the investment of over US$10bn including the upstream scope of the LNG value chain, thereby boosting the much-needed Foreign Direct Investment (FDI) profile of Nigeria.
The project is anticipated to create about 10,000 new jobs during the construction stage, and on completion, help to further diversify the revenue portfolio of the Federal Government and increase its tax base. The company said this was in line with its corporate vision of helping to build a better Nigeria. The construction period after FID will last approximately four to five years.
Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), while speaking at the event, affirmed that there was no going back on taking the FID in October, stressing that everything needed to be done was being done to make the FID a reality on the scheduled date.
Kyari who was represented by Ahmed Dikko, the corporation’s general manager, New LNG, said the management of NNPC was passionate about the project because it held the potential of boosting activities in the oil and gas sector and ultimately stimulating growth in the nation’s economy.
“Before us today is the signing of the Letter of Intent (LoI) for the Train 7 project. By 31st October, 2019, we will all gather together again to sign the dotted lines for the Final Investment Decision (FID) of the Train 7 project. This is indeed the wish of NNPC as a shareholder, and I will like to reaffirm to you all our support to carry out all the realignment to make the project a reality,” he stated.
Tony Attah, managing director and chief executive of the company, said Train 7 means a lot to Nigeria as there is no project that is bigger at the moment than that, at least within the gas space.
“So this is really a very big opportunity for Nigeria on the back of the potential of the investment value. I mean, if you look at it we are talking about $7 billion investment which you can link to foreign direct investment coming into the country,” he said.
“In the midstream of the oil and gas industry, about $5 billion is expected to be spent over the next five years building Train 7, but we have also enabled the upstream to develop the gas that we will need to run Train Seven,” Attah said.
The front end engineering design was awarded more than a year ago to B7 JV Consortium and SCD JV Consortium thereby pushing the company closer to realising its expansion goals of increasing liquefied natural gas production output from 22 million to 30 million tonnes per annum (mtpa).
A completed FEED process will pave way for engineering, procurement and construction (EPC).
NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (49 percent), Shell Gas B.V. (25.6 percent), Total Gaz Electricite Holdings of France (15 percent), and Eni International N.A. N. V. S.àr l (10.4 percent).
The company said the actualisation of the Train 7 project comes as NLNG celebrates 30 years of its incorporation and 20 years since exporting its first LNG cargo in 1999.
OLUSOLA BELLO & IGNATIUS CHUKWU, Port Harcourt
