Nigeria LNG

Nigeria LNG Limited (NLNG) is a liquefied natural gas (LNG)-producing company on Bonny Island, Nigeria.

History

Interest in LNG started in the 1960s when the idea of monetising​ flared gas was mooted. The Nigerian government set up a panel to look at the proposal and make recommendations on the feasibility of a LNG project in Nigeria. The panel recommended two LNG projects of three trains respectively— the first LNG project in the east of the Niger Delta and the second LNG project in the west of the Niger Delta. The Federal Executive Council approved the recommendations in April, 1975. However, attempts to progress the project were scuttled by a change of government.

By 1976, the Bonny LNG Limited (BLNG) was incorporated. The project was planned to build and operate a natural gas liquefaction plant capable of supplying up to 650 trillion Btu of LNG yearly. Had the project been realised at that time, it would have been the largest LNG project in the world. The plant capacity of 650 trillion Btu yearly was to be delivered by a fleet of 18 ships dedicated to a 20-year contract period. The United States was the planned prime destination, although the plan was later expanded to include Europe.

The progress on BLNG was again impacted by another change in leadership in the Nigerian government. By 1977, the investors downgraded their participation in the LNG project. In 1979, there was a transition to civil rule. However, this did not do much in advancing the BLNG project as inability to get the required funding hindered investment in gas.

The project again had to be delayed in 1982 due to a drop in oil price that impacted greatly on the country’s revenue. The investors in the project pulled out which marked the end of Bonny LNG. Between 1983 and 1985, the Federal Government set up another LNG working committee. This committee was inaugurated in March 1985 under the chairmanship of Mr. Gamaliel Onosode.

The committee had the responsibility of realising the LNG project in Nigeria. The first task the committee performed was to review the terms of reference that related to the establishment of a LNG business in Nigeria, with the intention of resolving all contractual, commercial, technical and financial issues. After all the knotty issues concerning shareholders and investors were resolved, NLNG was incorporated in 1989. ​ Production from its first operational train, Train 2, started in 1999 and Company’s first cargo left the shores of Bonny Island Rivers State, on the 9th of October, 1999 to Montoir, France.

Today, NLNG has a total production capacity of 22 Million Tons Per Annum (mtpa) of LNG and 5mtpa of Natural Gas Liquids (NGLs) from its six-train plant complex. The company has 16 long-term Sale and Purchase Agreements (SPAs) with 10 buyers and controls about 6 per cent of global LNG trade.

NLNG began its intervention in the supply of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, to the domestic market in 2007 under the NLNG DLPG Scheme. The supply has stimulated growth in the industry, guaranteeing LPG supply, availability and affordability. This has also inspired the development of different parts of the DLPG value chain.

In 2019, NLNG shareholders took the Final Investment Decision (FID) on its 7th train and awarded the Engineering, Procurement and Construction (EPC) contracts for the plant expansion in 2020. The long-awaited expansion will increase production capacity by 35 per cent from 22mtpa to 30mtpa and enhance NLNG’s competitiveness in the global market.

The company has a proven track record of resilient performance (Operational Excellence, HSE, etc.) and unswerving profitability.​

Operations

Nigeria LNG Limited operates six liquefaction units (LNG trains) producing 22 million tonnes per year of LNG. This amounts to roughly 10% of the world's LNG consumption. Trains 1, 2 and 3 have production capacities of 3.2 million tonnes per year, whilst trains 4, 5 and 6 have capacities of 4.1 million tonnes per year each.

The base project (Trains 1 and 2) which cost US$3.6 billion, was financed by NLNG's shareholders. The third train (expansion project), including additional storage, cost US$1.8 billion and was funded by shareholders as well as reinvested revenue from the base project. The NLNGPlus project (Trains 4 & 5) cost US$2.2 billion and was funded with a combination of internally generated revenue and third party loans amounting to US$1.06 billion. Train 6 (NLNGSix project) cost US$1.748 billion, financing was handled by shareholders. The total cost of building six LNG trains was US$9.348 billion.

The company has a wholly–owned subsidiary set up in 1989, Bonny Gas Transport (BGT) Limited, which provides shipping services for NLNG. BGT was set up in Bermuda with an ordinary equity holding from Nigeria LNG Limited and preferential equity holding from the sponsors, NLNG's shareholders.

Another wholly owned subsidiary of Nigeria LNG Limited is Nigeria LNG Ship Manning Limited (NSML), which was set up in 2008 to give dedicated attention to providing, developing and managing high calibre personnel for NLNG's maritime business.

Shareholders

Nigeria LNG Limited is jointly owned in the following proportions: Nigerian National Petroleum Company Limited (NNPC) owns 49%, Shell Gas B.V. owns 25.6%, TotalEnergies Gaz & Electricité Holdings owns 15% and Eni International owns 10.4%.

Sponsorship

Nigeria LNG Limited sponsors The Nigeria Prize for Science, The Nigeria Prize for Literature and The Nigeria Prize for Literary Criticism.

External links

• Official website