NLNG Seeks Govt’s Support for Trains 7&8

Train 7 Project
  • NLNG Seeks Govt’s Support for Trains 7&8

The Nigeria Liquefied Natural Gas Limited (NLNG) has sought the support of the Federal Government for its proposed Trains 7& 8, a vehicle that it intends to leverage to expand the frontiers of processing and exporting gas globally.

Its former Managing Director, Mr. Godswill Ihetu, said investing in gas processing and exporting is an ambitious one, which requires the support of its shareholders, adding that financial and material support from major partners are needed to achieve the desired result of sourcing for new markets to boost the NLNG earnings.

Ihetu said that Trains 7& 8 is a multi-billion dollar project that will boost the nation’s economy when it is completed, adding that Nigeria LNG is taking its time on the issue in view of its cost implications, approval from the government and building the plants.

He said: “It is difficult stating the amount of money that would be expended on the project due to the sensitive nature of the oil and gas industry, more so, when NLNG has not mentioned the amount of money, which Trains 7&8 would gulp. The NLNG do not have a reliable figure yet, but given the fact the six Trains cost $9.4billion, one can have an idea of the cost of the proposed Trains, when one calculates and adds the inflation cost in the last few years the existing trains were installed.”

According to him, the cost of buildings LNG Trains is high such that the Federal Government cannot bear it, adding that the need to involve Shell and two other oil majors in NLNG is imperative to achieve the goal of encouraging the growth of gas externally is imperative.

He explained the three key elements needed, which include getting solid funding, seeking a viable market outside the shores of Nigeria and signing of Special Purchase Agreements (SPAs). These elements are important for obtaining Final Investment Decision (FID) for the two Trains. He urged the shareholders to work together to achieve the goal.

Building of LNG Trains, Ihetu said, can only be effective, when the markets are available prior to the signing of Final Investment Decision.

On Brass LNG and Olokola LNG, he said the two projects from inception were of great importance to the Federal Government, adding that funding has delayed their take-off.

“Efforts were galvanised toward achieving the success of Brass and Olokola LNG, but the government does not have the money to make the projects work. This has prevented the two LNG projects from getting Final Investment Decisions needed for marketing gas abroad. The thinking of the government then was that the cost of building two separate LN G plants would be too heavy for it to bear. The government was considering other projects under sleeve, which needed huge funding, therefore, did not deem it necessary to spend so much on the gas projects,” he added.

He said President Muhammadu Buhari’s regime resuscitated the idea of establishing the Nigerian NLNG Limited by setting up what he described as LNG Working Committee between 1984 and1985, adding that the Committee formed what later transformed into Nigeria Liquefied Natural Gas in May 1989.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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