The headlines bespeak great benefits and advantages. They include over 12 000 direct and 40 000 indirect jobs during the construction phase, an inflow of more than $10bilion in Foreign Direct Investment for Nigerian upstream and other associated projects, and stimulation of the local economy.
Bonny Island is abuzz again with the frenzy of construction activities and will remain in that state for at least the next five years. It is courtesy of the flag-off by President Muhammadu Buhari on 15 June 2021 of constructing the NLNG Train 7 project. The Train 7 Project, NLNG affirms, “will increase NLNG’s production capacity from 22 to 30 million metric tonnes per annum”.
Despite these numerous advantages and benefits, Nigeria adopted the journey of the snail to this destination. At least five years behind a latter-day schedule, the investors made the Final Investment Decision for Train 7 on 27 December 2019. The shareholders are the Nigerian National Petroleum Corporation (49%), Shell Gas B.V. (25.6%), Total Gas Electricite Holdings France (15%) and Eni International N.A, N.V.S.a.l (10.4%).
The SCD Joint Venture won the Engineering, Procurement and Construction (EPC) contracts on 13 May 2020. SCD Consortium comprises Saipem of Italy, Chiyoda of Japan and Daewoo of South Korea. They will build one complete train and one standard liquefaction unit with a capacity of 8 metric tons per annum and associated utilities and infrastructure.
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Kudos to President Muhammadu Buhari for rousing to the task and getting NLNG Train 7 off the starting block. Finally. Nigeria is the most significant and ultimate beneficiary.
Nigeria LNG Limited encapsulates the story of Nigeria where we try so hard to snatch defeat from assured victory and, by cosmic intervention, manage to take the right course and deliver the ship safely in the nick of time. However, the journey to the NLNG’s initial four trains was even more complex and took almost 30 years from the era of National Development Plans.
Nigeria LNG Limited is probably the most significant and noteworthy investment in Nigeria to date. It is arguably the best in various areas, from return on investment to socio-economic impact, community relations, corporate social investment, and many more. Thus, NLNG is an impact investment with several multipliers. It set the paradigm in several areas.
NLNG has delivered dividends of US$18blion to shareholders over the years. Nigeria, through NNPC, earned 49% of this enormous inflow. But, unfortunately, the politicians recently made a hash of both the dividends and the income tax from this our foremost no-excuses and no-stories investment.
NLNG is the firm that is spending N120bilion to link Bonny Island to Bodo and change its narrative as a sea-locked island. In addition, it has spent approximately $24m on scholarship empowerment and vocational training for more than 7 000 young persons. Then there is its impact with Africa’s highest awards for literature, science and literary criticism, and CSR projects improving facilities in our first-generation universities.
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NLNG will finance Train 7 through its Balance Sheet and the USD3 billion multiple-sourced deal it recently signed with 30 reputable institutions. Financial advisers on the transaction were Sumitomo Mitsui Banking Corp (SMBC) and Guaranty Trust Bank. In addition, it involved Export Credit Agencies, development finance institutions, international commercial banks and Nigerian banks.
Many reasons account for why NLNG Train 7 is such a big deal. First, it comes against the backdrop of reduced FDI and big-ticket transactions. More significantly, it takes off amid growing concern for alternatives to crude oil as a primary income source for Nigeria. Note, however, that oil prices recently crossed the $70 thresholds.
Train 7 boosts the credentials and relevance of the Nigerian Content Development and Monitoring Board that worked closely with NLNG to score new highs pursuing local content. NLNG assures that Train 7 will give Nigerian indigenous service providers and manufacturers of goods first consideration without compromising business ethics, health safety and environment, and competitive pricing. Furthermore, it will retain in-country expertise through tech transfer as it patronises and develops the capacity of Small and Medium Scale Enterprises.
Train 7 should also open investment opportunities in manufacturing and capacity development, employment and massive job opportunities during the construction phase. It will carry out 55 per cent of engineering and procurement in Nigeria, while 100 per cent of the installations and construction will happen in Nigeria.
NLNG is the gift that keeps giving to Bonny Island. It is the cargo-cult dream come true. Train 7 will cause an expansion of the boundaries of Bonny Island as NlNG constructs a new Workers Village on about 31 hectares of land and an upgraded Joint Venture Village to accommodate construction workers. It will also lead to future increased availability and affordability of LPG (cooking gas).
Experts say LNG is the cleanest fossil fuel. For Nigeria, LNG has reduced gas flaring from petroleum production activities from about 65 per cent in 1999 to 12 per cent. The European Commission says it represents an excellent alternative to reduce greenhouse gas emissions and help combat global warming.
For Nigeria, NLNG’s Train 7 is much-needed good news to break the pall of many unsavoury tales.
