Buhari Excited as NNPC, Others Sign NLNG Train 7 Deal

NNPC
  • Buhari Excited as NNPC, Others Sign NLNG Train 7 Deal

The Nigerian National Petroleum Corporation, Shell, Total and Eni have signed the front-end engineering design contract of the Train 7 of the Nigeria Liquefied Natural Gas Limited.

The contract was signed in London on Wednesday and the event also witnessed the commemoration of the repayment of $5.45bn loan for Trains 1 to 6 by the NLNG shareholders.

The NLNG Train 7 project aims to increase the company’s production capacity by the expansion of Trains 1-6 and associated infrastructure at an estimated cost of $4.3bn, according to a statement by the NNPC.

The target Final Investment Decision date for the project is the fourth quarter of this year.

The Group Managing Director, NNPC, Maikanti Baru, expressed the corporation’s readiness to support the Federal Government’s aspirations to actualising the Train 7 project.

Jointly owned by the NNPC at 49 per cent; Shell, 25.6 per cent; Total, 15 per cent; and Eni, 10.4 per cent, the NLNG’s journey started in 1999 with the inauguration of Train 2 ahead of Train 1, which was inaugurated in 2000.

The company grew to a six-train facility with the inauguration of Train 6 in 2007.

The company sourced the principal amount of $4.043bn from its shareholders in their respective shareholding proportions to partly fund the construction of Trains 1-6.

While the interest during the construction period was capitalised and added to the principal for repayment from the operational date of the financed trains, the total capitalised interest in the shareholders’ loan was $1.411bn, which, in addition to the total principal drawdown of $4.043bn, accounted for the total loan amount of $5.45bn repaid by the company.

Baru said as a 49 per cent shareholder in the NLNG, the corporation had immensely contributed to the success of the company over the years, supporting equity participation and contribution to shareholders’ loan.

“Through critical interface with relevant government agencies, we have played a pivotal role in the actualisation of Trains 1 to 6. Given the success of T1-T6, the NNPC is therefore fully committed and aligned with the government aspirations to replicate the success of this project. Therefore, our current focus is to kick-start T7,” Baru said.

He stated that the prompt servicing of shareholders’ loan with accelerated repayments did not only demonstrate the NLNG’s credit worthiness, it had also reiterated its robust financial position.

The NNPC boss also noted that as of Wednesday, the NLNG had generated revenues of more than $25bn to the Federal Government, comprising dividends of about $17bn and taxes of $7.2bn.

Meanwhile, President Muhammadu Buhari on Wednesday congratulated the board, management, members of staff and shareholders of the NLNG on the signing of the contracts for the Front End Engineering Design of the Train 7 of the NLNG project.

In a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, the President also congratulated the NNPC and other Joint Venture partners, Shell, Total and Agip (Eni), on the development.

The President welcomed the signing of a Memorandum of Understanding between the NLNG, B7 JV Consortium and the SCD JV Consortium on Wednesday in London.

Shehu explained that the agreement paved the way for the additional Train 7 that would increase the country’s gas production output from 22 million tonnes per annum to 30 metric million tonnes per annum.

The statement read in part, “President Buhari also welcomes the commitment of all parties in supporting his administration to launch the gas revolution in Nigeria by ensuring the realisation of Train 7, which has been stalled for many years under previous administrations.

“He is optimistic that this significant step would culminate in a Final Investment Decision for the much-awaited multi-billion dollar Train 7 expansion programme by the end of this year.

“The President notes that the signing of the contract for the plant expansion project after an eight-year delay is a sign of irreversible commitment by the Joint Venture to enter a Final Investment Decision, and a clear indication that the confidence of investors is coming back to Nigeria following the good governance practices instituted by his administration.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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