The Nigerian Content Development and Monitoring Board (NCDMB) and the Nigeria LNG Limited (NLNG) on Friday signed the Nigerian Content Plan (NCP) for the NLNG Train 7 project, taking a big step towards kick starting the huge gas project that would create a flurry of activities in the oil and gas sector and contribute immensely to the nation’s economy.
The Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote and the Managing Director of NLNG, Engr. Tony Attah signed the NCP in Abuja at an event witnessed by senior personnel of the Nigerian National Petroleum Corporation (NNPC), Shell, Total and ENI – shareholders of the NLNG.
The Train 7 project is expected to expand NLNG’s production capacity by 35 per cent from 22 Million Tonnes Per Annum (MTPA) to 30 MTPA. At peak construction, the Train 7 project is projected to provide direct, indirect and induced employment for over 10,000 persons.
The Executive Secretary emphasised at the signing ceremony that Train 7, like other forthcoming major projects in the oil and gas sector must leave a legacy facility, just like Total’s Egina deepwater, which catalyzed the development of an FPSO integration facility in Lagos.
He explained that the expected job explosion from Train 7 is banked on the Nigerian Content Plan, which provides for 100 percent engineering of all non-cryogenic areas in-country. The total in-country engineering man hours is set at 55 percent, which exceeds the minimum level stipulated in the NOGICD Act, in line with the Board’s resolve to push beyond the boundary of limitations, he added.
Wabote revealed that the Train-7 scope will deliver 100 percent in-country fabrication of the Condensate Stabilization Unit, pipe-racks, flare system, and non-cryogenic vessels. Site civil works on roads, piling, jetties and will also keep local businesses occupied.
He added that “it will also provide great opportunities for utilization of local goods and services in addition to enhancing and developing new capacities and capabilities for the local supply chain. There will be 100 percent local procurement of all LV cables and HV cables, all non-cryogenic valves, protective coatings, and all sacrifice anodes. 70 percent of all non-cryogenic pumps and control valves will be assembled in-country.”
Other spin-off opportunities would include logistics, equipment leasing, insurance, hotels, office supplies, aviation and haulage.
The Executive Secretary pointed out that the increased number of NLNG Trains would also provide huge business opportunities for local businesses to build capabilities in the maintenance of LNG plants, especially in the area of cryogenics. The project would also catalyze other upstream gas supply projects required to keep the LNG train busy and make stranded gas fields in the shallow and deep offshore in the area economical.
In his comments, the Managing Director of NLNG confirmed that the full value network of the Train 7 project was about $12bn, including the net cost of the project, estimated in the region of $4bn to $5 billion and a similar additional spend at its operational base in Bonny, Rivers State. “It is also about the upstream development which is the real gas that will come to us. That also is a huge investment of $5 to $6 billion. So, potentially, the full value network is almost $12 billion.”
Engr. Tony Attah underscored that the Nigerian Content Plan for Train 7 contained clear and robust Local Content provisions that are significantly higher than the previous NLNG projects.
“NCDMB and NLNG are fully aligned to collaborate during the operationalization of the plan. This synergy will ensure that value added opportunities for Nigeria are indeed maximized and the Train 7 project is delivered to meet international standards of quality and safety.”
He also stated that NLNG shareholders are primed to take the Final Investment Decision (FID) for the project before the end of Quarter 4 2019.
The MD further highlighted that the expected increase in the production capacity of LNG “will reinforce the company’s comparative and competitive advantage in the global LNG market while also increasing the country’s revenue and foreign investment profile. This is in addition to moving the nation’s economy from being oil-based to becoming a gas-based economy to be reckoned with globally. We are here to enable gas. Nigeria has ridden on the back of oil for more than 50 years, it is now time to fly on the wings of gas.”