LNGpedia

Nigeria: Country’s Capacity to Triple LNG Output Intact - Ibeneche

Allafrica.com, Yemie Adeoye, 31 March 2009

WITH the absence of any negative development which may hinder the growth of the Nigeria gas sector, the possibility for the country to triple its current Liquefied Natural Gas (LNG) output remains very much alive and growing.

These were the exact words of the Managing Director of the Nigerian Liquefied Natural Gas Company, Mr Chima Ibeneche while delivering his presentation at the Nigerian Oil and Gas (NOG) conference Which held recently in Abuja

He stated further that this feat can only be achieved if the current global economic downturn does not force it to cancel or delay planned projects.

He disclosed that the country could add 40 million tonnes per year from the current 22 million tonnes if the proposed Brass LNG, Olokola LNG and an expansion at NLNG are executed.

“We know that predicting growth in the LNG supply chain is quite difficult because many projects don’t happen as they are planned. There are many factors, including the current financial meltdown that can slow down the achievement of these projects,” Ibeneche said.

He cited two floating LNG projects and a second Bonny Island plant by Exxon Mobil that have been stuck on the drawing board as examples.

“With the global uncertainties relating to demand and the funding of Nigerian LNG projects, the economics will need to be very carefully re_evaluated to determine the economic viability and profitability of any and all projects,” Ibeneche added.

Nigeria is the fifth largest LNG producer, supplying 10 per cent of the world’s supplies.

Meanwhile, the final investment decision (FID) on the proposed Brass LNG project, which could add 10 million tonnes per year to Nigeria’s capacity is yet to be made.

Chevron was originally a partner in the $5 billion Brass project until it pulled out to focus on Olokola instead and the company was replaced by Total.

The Brass plant will be built in Bayelsa State, near the Brass oil export terminal and aside from the production of LNG, the Brass LNG will also produce 2.5 million tonnes a year of liquefied

petroleum gas, otherwise known as cooking gas.

Brass LNG shareholders were initially due to make a decision by the end of 2006, but ConocoPhillips called for an indefinite postponement following an increasing wave of attacks on oil workers and destruction of oil installations by the Niger Delta militants.

Total has a 17 per cent stake in the project, while other partners include Eni, ConocoPhillips and the NNPC.

In 2006, the NNPC signed a Memorandum of Understanding (MoU) with Shell, Chevron and BG group to formalise the $6 billion Olokola LNG project.

The four_train Olokola development, which will have a total capacity of 22 million tonnes a year, was initially scheduled to start its first two trains in 2011.

Together with other projects, it would make Nigeria second world’s biggest producers of LNG after Qatar.

NNPC has a 49.5 per cent stake in Olokola, with Chevron and Shell each holding 18.5 per cent interests and BG, 13.5 per cent.

Olokola, which was being fast_tracked by the administration of former President Olusegun Obasanjo before the tempo slowed down, will be built in the boundary between Ondo and Ogun states.