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Plan for two more trains at NLNG gathers steam

Seven Plus project — comprising trains 7 and 8 — could be in line for a final investment decision as early as next year

A long-dormant $25 billion project to build two more trains at the Nigeria liquefied natural gas (NLNG) complex on Bonny Island, Nigeria could be sanctioned next year.

An informed source familiar with the plans of the NLNG Ltd joint venture partners — state-owned Nigerian National Petroleum Corporation, Shell, Total and Eni — said the shareholders tentatively estimate that a final investment decision on the Seven Plus project could be taken in 2018, despite other reports suggesting a decision may only be taken in 2021.

If this fast-track schedule is attained, first LNG cargoes could be offloaded in 2022.

The Nigerian source told Upstream that NLNG’s shareholders are currently assessing gas feedstock sources for the two-train scheme. 

“It’s likely to be greenfield associated gas,” he said.

NLNG's chief executive Tony Attah said last month that the project is essentially ready to be launched.

"Technology is here, people are here and the partners are already lining up," Attah said.

Seven Plus comprises trains 7 and 8, which, once online, would boost capacity at the Bonny Island facilities from 22 million tonnes per annum to about 30.5 million tpa.

The project has been in gestation for more than 10 years, with the TSKJ consortium — comprising Paris-based Technip, Italy’s Snamprogetti, KBR of the US and JGC in Japan — having completed front-end engineering and design studies in 2007.

Given the time that has elapsed since these studies were completed and how technology has moved on, the Nigerian source said NLNG will carry out fresh engineering work — possibly in the form of a FEED contest — to come up with the best solution.

“NLNG will go to FEED once again,” the source said, adding that revised technical and commercial bids will then be sought for what is expected to be a turnkey construction contract.

In 2008, two groups were in the race for the engineering, procurement and construction order for Seven Plus — TSKJ and a pairing of Japan’s Chiyoda and UK-based Foster Wheeler. Foster Wheeler was subsequently acquired by Amec, which is currently in the process of being bought by Aberdeen-based Wood Group.

Between 1995 and 2007, TSKJ built NLNG’s six existing trains at Bonny Island but was subsequently mired in corruption scandals.

It is unclear if this consortium will be reconstituted for Seven Plus.

TSKJ was awarded an EPC contract covering the first two trains at Bonny in December 1995, with Train 2 coming online in 1999 followed by train one in 2000.

The consortium completed Train 3 in 2002 and trains 4 and 5 (known as NLNG Plus) in 2005 and 2006, respectively, with Train 6 becoming operational in late 2007. These half-a-dozen trains are currently fed by about 1.236 trillion cubic feet per annum under long-term supply agreements.

However, pipeline sabotage has disrupted supplies in recent years, leading NLNG executives to warn that unless this issue is addressed, the government's share of revenues from LNG sales will be adversely affected.

Gas feedstock is expected to average more than 2.8 billion cubic feet per day over the next four years, sourced almost exclusively from three joint venture areas operated by Shell, Total and Eni in partnership with NNPC.

More than half the feedstock comes from Shell-operated assets, including the Gbaran-Ubie and Soku fields in OMLs 23 and 28 as well as the Bonny, Bonga and EA assets. Early this year, however, gas from the Bonga and EA offshore fields began to be diverted to the Nigerian domestic gas market via the Escravos Lagos Pipeline System.

The Eni-controlled gas comes from the Obiafu-Obrikom integrated gas supply centre which receives gas from a wide range of fields in OMLs 60, 61, 62 and 63 including Idu, Akri, Kwale, Irri, Oshie, Tebidaba and Ebocha.

Total derives its gas from the onshore Obite, Ibewa and Obagi fields as well as the offshore Amenam, Akpo and Ofon fields.

In addition, under a special deal with Shell, an indigenous company called Niger Delta Petroleum Resources is supplying gas to NLNG from its Ogbelle-Obumeze facilities.

Output is running at 35 million cubic feet per day but could hit 100 MMcfd.

LNG produced at Bonny Island is sold under long-term contracts and exported to the US, Asia and Europe by the Bonny Gas Transport fleet, which is owned by NLNG Company.

The company is finalising its strategy for the re-marketing of LNG volumes for trains 1, 2 and 3 for which sales and purchase agreements are nearing expiration.

Gas from these facilities is currently sold to terminals in France, Spain and Turkey

Activities are also ongoing for the marketing of volumes for the proposed Train 7 project.

NNPC holds a 49% stake in NLNG, with Shell on 25.6%, Total with 15% and Eni on 10.4%.