The Nigeria Liquefied Natural Gas Limited (NLNG) Wednesday said it was shopping for $7 billion from the global financial markets to expand its operations and increase its production capacity from 22 million tonnes per annum (MTPA) to 30 MTPA.
The company also said it had fully paid without default the $5.45 billion taken from its shareholders to build its six existing LNG trains.
The company’s expansion loan search report was preceded Wednesday by a pat on the back by President Muhammadu Buhari for it and its collaborators, the Nigerian National Petroleum Corporation (NNPC), Shell, Total and the Nigerian Agip Oil Company, for signing a deal in London to ensure the attainment of the 30 MTPA output.
The Managing Director of the NLNG, Mr. Tony Attah, revealed at a ceremony in London to commemorate the repayment of the loan, that the funds being sought would cover the company’s expansion programme, construction of Train 7, and investment in Nigeria’s upstream gas sector to ensure the sustainability of feed-gas supply to its existing trains 1 to 6 and the new Train 7.
“Let us get this very clear. NLNG is a mid-stream company that has monetised over 5.96 trillion cubic feet (tcf) of associated gas, which would have otherwise been flared thus helping to build a better Nigeria. However, what we are doing is not just looking to fund the expansion of the plant but also to ensure sustainability of feed-gas supply to the plant, for the continued success of NLNG. All of these align with our belief that gas is a catalyst for industrial and economic transformation which will position Nigeria to become a leading gas producing country,” Attah said.
He said the success story of the NLNG project was due to the shareholding and governance structure of the company that had made it an independent incorporated joint venture, guaranteeing an independent board of directors, effective decision making as well as funding for its projects, which he added was critical for the sustenance of the project.
According to him, “Over the decades, the company has raised funds for its projects, from a combination of shareholders loans, internally generated revenue and third party loans. In all of these financial ventures, NLNG demonstrated financial discipline and character by abiding by loan covenants, terms and conditions without a single breach or default, and we believe this positions the company as a lenders delight.”
Attah said the company’s financial credibility was self-evident, explaining it would be testing the financial market once again with its sustainable and expansion projects estimated at $7 billion.
“Raising $7 billion is no small feat; anywhere in the world, this will be a major event. Therefore, we will be seeking support from the local and international financial institutions, our shareholders and the Nigerian government in bringing to reality the dreams of our founding fathers and achieving our vision of helping to build a better Nigeria,” he said.
He argued that for Nigeria to retain a good share of the global LNG market, it needed to be quick about the Train 7 project, adding: “Train 7 is the next big deal, we are coming back straight to the market.”
In his speech, the Chairman of the NLNG board, Dr. Osobonye LongJohn, said: “Today, our sense of pride is fuller by the demonstration of excellence, integrity and loyalty in the full and complete repayment of over the $5 billion loan. This is inspiring.”
He commended the shareholders for believing in the board and congratulated the workers and management of the company.
“We on the board of the company remain fully committed and will provide the necessary momentum to deliver its future plans,” he said.
The Deputy Managing Director of NLNG, Sadeeq Mai-Bornu, stated that NLNG had contributed immensely to Nigeria’s economy since its inception when the first LNG cargo was loaded in October 1999.
He said the company had paid over $33 billion in dividend, adding that payment to Joint Venture (JV) feed-gas suppliers by NLNG from inception till date amounted to some $24 billion.
Meanwhile, the company has awarded the contracts for Front End Engineering Design (FEED) of the Train 7 project to B7 JV Consortium and SCD JV Consortium, thus inching closer to realising its expansion goals of increasing output from 22MTPA to 30MTPA.
The award of the FEED contract to the consortia and signing of the contract documents were done shortly after the loan repayment commemorative meeting.
NLNG said a completed FEED process would pave the way for the Engineering, Procurement and Construction (EPC) pricing and bidding processes which are preconditions for FID on Train 7.
The consortia, B7 JV Consortium, comprised American company KBR Inc., Technip of France and Japan Gas Corporation (JGC); as well as SCD JV Consortium, made up of Saipem of Italy, Japan’s Chiyoda and Daewoo of South Korea.
NLNG indicated they would participate in a dual FEED process and produce a Basic Design Engineering Package (BDEP) that would determine their EPC pricing, and eventually their bids to construct the train.
Buhari Congratulates NLNG, NNPC, Shell, Total, Agip
Meanwhile, the Senior Special Assistant to the President on Media and Publicity, Malam Garba Shehu, Wednesday stated that President Buhari had congratulated the companies and also welcomed the signing of the memoranda of understanding (MoU) between NLNG, “B7 JV Consortium” and “SCD JV Consortium.”
According to him, Buhari also welcomed the support of the stakeholders to his administration’s move to launch “gas revolution” in Nigeria by ensuring the realisation of Train Seven, which he said had been stalled for many years under previous administrations.
According to Shehu, Buhari was optimistic that this significant step would culminate in a Final Investment Decision (FID) for the much-awaited multi-billion dollar Train 7 expansion programme by the end of 2018.
Shehu added that the president also described the signing of the contract for the plant expansion project after an eight-year delay as a sign of irreversible commitment by the joint venture to enter an FID.
He said the president also described it as a clear indication that the confidence of investors was coming back to Nigeria following the good governance practices instituted by his administration.