Partners in the Nigeria LNG (NLNG) project reached a milestone this week with formal signing of contracts for a dual front-end engineering and design process ahead of a planned capacity expansion to 30 million tonnes per annum of liquefied natural gas.

Contracts with one consortium comprising Italy’s Saipem and Japan’s Chiyoda and another grouping of US player KBR and JGC of Japan were signed in London on Wednesday as NLNG also officially marked the full repayment of $5.45 billion in shareholder loans towards construction of the first six trains.

Upstream reported last month that NLNG had chosen the two consortia for a dual FEED process for Train 7, which is set to raise capacity by about 35% from the current 22 million tpa.

That FEED work could be finished by the end of this year, paving the way for a final investment decision on the latest train at Bonny Island in Rivers State late this year or early next year.

NLNG stakeholders comprise state player Nigerian National Petroleum Corporation (NNPC) on 49%, Anglo-Dutch supermajor Shell on 25.6%, French supermajor Total on 15% and Italian major Eni on 10.4%.

Speaking to stakeholder representatives and financiers on Wednesday, NLNG chief executive Tony Attah said the partnership is ready to come back to the investment market to secure funds for Train 7, having paid the final installment of its initial shareholder loan last December.

“We are coming back to the market straight after closing this,” Attah said of the $5.45 billion in loans, $3.31 billion of which was required for trains 1 and 2, with $1.28 billion for the Train 3 expansion, $772 million for trains 4 and 5 and $83 million for Train 6.

“For 20 years we never missed one payment — not once,” Attah said of the now repaid facility, thanking stakeholders for taking “a leap of faith” in what was a greenfield project.

The chief executive, referring to data from the BP Statistical Review of World Energy 2017, said Nigeria has slipped from third to ninth in terms of proven gas reserves.

However, with more than 600 trillion cubic feet of potential resources, this could push the Opec member back to number four, behind Iran, Russia and Qatar, respectively at one, two and three.

NLNG’s Train 7 scheme will actually involve two small trains, each of between 3 million and 4 million tpa capacity. A decade ago, the partnership shelved an ambitious plan to add two new trains, each of 8 million tpa capacity, in a project called Seven Plus.

Train 7 may not be the extent of NLNG’s expansion plans, however. Maikanti Baru, group general managing director at NNPC, said the state-owned player was committed to making the partnership’s Train 7 “wish become a reality”, but hinted at possible further expansion.

“We have the land, we have the space for more trains,” Maru said at this week’s event in London.

Baru told financiers present at the event in the City of London that there will be many investment opportunities around Train 7, including for projects to provide feedstock gas. NLNG is also in the process of remarketing gas from the first three trains.

NLNG commercial director Godwill Dike said discussions with interested parties are progressing well and that sanction of Train 7 can proceed without final commercial arrangements for trains 1 to 3.

Weekly

Milestone for NLNG as FEED contracts signed