• Monday, March 04, 2024
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BusinessDay

LADOL, Samsung to invest $300m in building of Egina deepwater facility

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Following the resolution to settle the long-stretched business conflict between both companies, Samsung Heavy Industries Nigeria Limited, a subsidiary of Samsung Heavy Industries Korea, has finally formed a joint venture company with Lagos Deep Offshore Logistics Base (LADOL) to develop a deepwater facility in the country. The joint venture company called SHI-MCI FZE is expected to build a $3 billion Egina FPSO integration and fabrication facility at LADOL Free Zone in Lagos for Total Upstream Nigeria Limited, operator of the block, and the Nigerian National Petroleum Company (NNPC).

A letter announcing the joint venture, jointly signed by Ks Lee, managing director, SHI Nigeria, and Amy Jadesimi, managing director of LADOL, and seen by BusinessDay, stated that Samsung, which is expected to make investment in the development of SaNTA training academy with LADOL for breeding of human capacity required to drive the project, would also be the Engineering, Procurement and Construction (EPC) contractor for the Egina FPSO project.

The letter disclosed that Samsung and LADOL were expected to jointly invest the sum of $300 million in the development of the new facility in LADOL FTZ, noting that the joint venture was an example of the impact the Local Content Act of 2010 was having on the oil and gas sector. It further applauded Diezani Alison-Madueke, minister of petroleum resources, for making the joint venture possible.

The facility will have a storage capacity of 2.3 million barrels and a targeted production capacity of 200,000 barrels per day which, analysts say, would be one of the largest FPSO facilities in the world.

Jadesimi, who confirmed to BusinessDay that both companies had settled their differences out of court, said the facility would be a huge local content milestone for Nigeria and was expected to create an estimated 50,000 direct and indirect jobs in Nigeria over the next few years.

“The essence of the facility is to ensure that large vessels including FPSOs are integrated (partially constructed and assembled) onshore in Nigeria. And building this facility will significantly increase the sizes of fabrication, engineering, procurement training, design and raw material such as steel markets in Nigeria,” Jadesimi said, adding that construction of the facility, which had already begun in LADOL Free Zone, was expected to take a period of 18 months.

“Once completed, the facility will have the capacity to fabricate about 1,000 tonnes per month and capable of integrating all the FPSO facilities that are expected to be built in Nigeria in the next decade,” she said.

The LADOL boss further noted that billions of dollars currently being exported abroad to fabricate and integrate FPSO would be domesticated in Nigeria, while billions of dollars in new revenue would be earned from market expansion. This increase in capacity would position Nigeria to become West Africa’s hub as well as generate the sustainable long-term GDP growth required for Nigeria to become one of the world’s leading economies in line with Vision 2020:20.

It would be recalled that the project, which ought to have started in 2013, was stalled by litigation by LADOL over the alleged intention of Samsung to short-change and replace the local logistics company with another. Both companies finally agreed to settle the dispute out of court so as to progress with the execution of the project.   

Uzoamaka Anagor