• Friday, May 24, 2024
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BusinessDay

Upstream business gets boost as $3.5bn Egina FPSO integration project takes off

The upstream sub-sector of the Nigerian oil and gas industry has received a major boost as the long-awaited $3.5 billion floating, production, storage and offloading (FPSO) integration project designed to support the in-country Egina oil field development was flagged off at the Lagos Deep Offshore Logistics (LADOL) base in Lagos at the weekend.

The project, which will ride on the back of the Nigerian Local Content Act, to create about 50,000 direct and indirect jobs, also has the ability to develop human capacity through skill acquisition and technology transfer.

BusinessDay findings revealed that Samsung Heavy Industries Nigeria Limited (SHI), a leading global oil and gas EPC company, and LADOL Free Trade Zone entered into a joint venture partnership to form a new company known as SHI-MCI Free Zone Enterprise, to deliver on the project.

The joint venture company would invest about $300 million to develop the Egina fabrication and integration facility for Total Upstream Nigeria Limited.

Industry stakeholders expect that the Egina facility when completed would become a hub for fabrication and integration of vessels and other marine facilities which will service the West African sub-region.

“Today marks the beginning of Africa’s first mega FPSO fabrication and integration facility that is designed to change the industrial landscape of Nigerian upstream sub-sector,” said C W Kim, managing director of SHI-MCI, during the ground breaking ceremony of the project in Lagos.

Kim stressed the commitment of SHI-MCI to work with all the relevant government agencies, including other project partners to deliver on the project in due time.
Presenting her welcome speech, Amy Jadesimi, managing director of LADOL, who disclosed that it took the indigenous logistics firm 13 years of commitment to achieve this laudable milestone, stated that the project was conceived in line with the vision of LADOL to create a wholly Nigerian platform that would take the advantages created by local content to generate thousands of jobs.

Jadesimi said the FPSO facility would transform the upstream sub-sector of oil and gas by increasing Nigeria’s fabrication, integration and steel markets.

Giving an insight into the project, Frank Ejizu, general manager of SHI Nigeria, who revealed that construction work on the project site started in August 2014 following the settlement of the earlier disagreement between both parties, also said that the fabrication and integration yard would be completed and ready for operation in October 2016.

“The first fabrication and integration work would kick-off in 2017 and SHI-MCI has sent some selected Nigerians to Korea to receive appropriate training in preparation for the take-off of the project. And the company is committed to delivering the project,” Ejizu explained.

He further said: “SHI as the EPC contractor, own 70 percent stake in the company, while LADOL owns the remaining 30 percent for the provision of a yard for building the integration facility. The facility yard would comprise of 10,000 metric tons production capacity; 2.5 million barrels of oil; 13.5 meters draught; 10.5 meters draught for the Egina project and 5,000 metric tons of heavy lifting area to be used for integration.”