THE NATION THURSDAY, MAY 17, 2012
3
NEWS
Nigeria’s ‘loss’ of LNG market
•NLNG ship: Any hope for more supplies to the global market?
‘We account for eight per cent of global LNG supplies’ The Managing Director of the Nigeria Liquefied Natural Gas Limited (NLNG), Babs Omotowa, in a speech on Tuesday while receiving former Head of Interim Government (ING), Chief Ernest Shonekan, admitted the company has slipped from controlling 10 per cent of the global market share . Excerpts: from gas as from oil, NLNG has successfully pioneered gas monetisation. It is the most significant arrow-head in government’s quest to end gas flaring in the country with the attendant environmental benefits. It is also the biggest single contributor to government’s efforts to diversify the Nigerian economy and income portfolio. The Nigerian government has reaped over $9 billion in dividends from Nigeria LNG Limited from 2004 to date. The project today has assets worth over $13 billion. 49 per cent of this belongs to the country through the Nigerian National Petroleum Corporation, NNPC. The company contributes – in revenue terms – over $9 billion yearly to the national GDP. But NLNG is more than hard and cold facts and figures. Whilst making so much money for its share-
NLNG currently accounts for eight per cent of the global LNG supplies; it used to be 10 per cent!
‘
N
IGERIA LNG’s current 6-train facility has a capacity for 22mtpa of LNG, and up to 5mtpa of Natural Gas Liquids (NGL). The company has rapidly grown from its well-earned reputation as the world’s fastest growing LNG plant to a stable production operation with buyers across the Atlantic Basin and Asia Pacific regions, sending one cargo of LNG everyday down the Bonny River to buyers all over the world safely, timely. NLNG currently accounts for eight per cent of the global LNG supplies; it used to be 10 per cent! Since October 1999 when the first LNG cargo was loaded for delivery in France and following a Final Investment Decision by the shareholders in November 1995, Nigeria LNG Limited has brought significant value to Nigeria. In line with government’s vision of generating as much revenue
‘
•Omotowa holders, generating considerable Foreign Direct Investment (FDI) for Nigeria, and creating jobs (18,000 at the peak of construction activities),
THE FIGURES
THE FACTS
22m •Total metric tonnes produced annually by NLNG 81m •Total annual metric tonnes by Australia 80m •Total annual metric tonnes by Qatar $2.2b •Dividends expected from NLNG seventh train •Number of NLNG projects in Australia 10 $9b •The country’s dividends from NLNG delay in the progress of LNG projects may dip Nigeria’s market share in the global liquefied natural gas supply by a marginal 5 percent in 2017. Omotowa, while speaking at the 2012 edition of the Nigeria Oil and Gas (NOG-12) conference in Abuja, said output has stagnated at 22 million metric tonnes per annum. He said: “Looking at the market share dip to 10 percent in 2008; which is now 8 percent and will be 5 percent by 2017. Accelerated progress on Train 7 and other LNG projects
will help build a better Nigeria.” But going by a statement recently credited to the NNPC Group Managing Director, Austen Oniwon, the Final Investment Decision (FID) for the Train 7 may wait till next year. He was quoted to have given hint of this at the NOG-12 conference. At a meeting with the NLNG management in his office in February, Oniwon said: “We believe that like the Brass LNG, the NLNG’s Train 7 is also viable. And we will continue to support its success. I want to en-
NLNG remains at heart a human and humane company. We are driven by the understanding that a good corporate citizen must be a responsible
• Australia - 10 LNG projects, with 20 trains • Qatar- Aggressive second largest supplier • Mozambique- Set to challenge Nigeria • United States- plans 1.1 billion cubic feet per day • China- with 1,275 trillion cubic metres gas reserves • Nigeria- LNG projects help reduce gas flared • Over $8 billion FDI from NLNG seventh train • Nigeria has over 160 trillion cubic feet reserves • First phase of Brass LG to generate 20m m/tonnes • No firm decision on OKLNG yet
courage you to continue to do all pre-FID activities at minimum cost so that as soon as we are through with Brass, we can quickly move to Train 7.”
Benefits of Train Seven, other LNG projects Industry watchers are of the opinion that building the seventh train of the NLNG plant will bring in Foreign Direct Investment (FDI) estimated at over $8 billion and help
reduce flared gas, and improve the country’s revenue profile. The country will also reap an additional $2.2 billion annually in dividend. With Train 7, the NLNG, said industry watchers, will provide about 10,000 jobs. Since it opened shop in Bonny, NLNG Limited has provided over 2,000 jobs each construction year and 18,000 jobs at the peak of construction. The country, which invested in the company through the Nigeria National Petroleum Corporation
and caring member of the society in which it operates. We believe that a company cannot morally lay claim to success if it operates in a failed society, hence our deliberate policy on, and approach to, sustainable corporate responsibility. A major part of our Nigerian content programme is the Nigerianisation scheme. 93 per cent of our workforce is Nigerian, a substantial achievement considering the relatively few years of operating such a pioneering engineering business in Nigeria. NLNG is also at an advanced stage with the ship management knowledge transfer with our ship managers STASCo and Anglo Eastern. Under the arrangement, we have already taken over the management of four LNG vessels. Nigerianisation has also yielded six LNG ship captains and four chief engineers.
(NNPC), they said, also stands to get more dividends. It has so far received $9 billion as dividends from the company. The Brass LNG, The Nation learnt, is about to take Final Investment Decision for 20 million metric tonnes. In the case of the OK LNG, located between Ondo and Ogun states, Nigerians may have to wait till 2014 to know what direction it is moving. Like Shonekan noted, these efforts at developing the country’s gas reserves are grossly inadequate, given the fact that a country like Australia with less gas reserves now have an LNG output of 81 metric tonnes. He also believes the country has a capacity to undertake more than one LNG projects at once, which suggests he sees no sense in NNPC’s position that the seventh NLNG train has to wait for the Brass LNG. Omotowa believes the delay in progressing the NLNG Train 7 project, the Brass LNG and OK LNG projects, has deprived Nigeria of raising its LNG production to 52 million metric tonnes per annum. But if the words of Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, are anything to go by, things may change soon. The minister, at an award ceremony in Howard University, United States recently, said the nation’s capacity in LNG production would increase to 46 metric tonnes annually.