Saipem and its partners Chiyoda and Daewoo E&C have won the race for Nigeria LNG (NLNG)’s Train 7 expansion contract in a deal thought to be worth about $6 billion.

The so-called SCD consortium signed a letter of intent with NLNG in Abuja this week that is set to lead to a full engineering, procurement and construction award for the 8-million tonne per annum, two-train facility at Nigeria’s Bonny Island.

The SCD partners fought off stiff competition from the B7 consortium, comprising KBR, TechnipFMC and JGC, after each submitted EPC bids in June following a dual-front-end engineering and design competition, which ended in May.

Upstream was told by one project watcher that price was not the main determining factor in the selecting the SCD consortium, with local content playing a bigger role.

NLNG chief executive Tony Attah said signing of the letter of intent is a “bold” and “very clear statement that we are forging ahead with Train 7”, which is set to raise capacity at NLNG from 22 million to 30 million tpa with the addition of two similar-sized small trains.

“With the signing of the letter of intent, we hope that by the end of October a final investment decision will be signed for Train 7. This will ensure we attain our ambition of increasing our production by 35%,” the company added.

Attah vowed earlier this year that the project would be sanctioned in the fourth quarter, while newly installed Minister of State for Petroleum Resources Timipre Sylva has wasted no time since coming to office in urging the NLNG partners to press ahead with the expansion.

Local content was always expected to play a key role in NLNG’s decision-making process on the EPC contract, with one source saying previously that meeting this requirement will be “quite expensive”.

In March, the Nigerian Content Development & Monitoring Board (NCDMB) and NLNG agreed a Nigerian Content Plan for Train 7.

Simbi Wabote, NCDMB’s executive secretary, said that at peak construction the Train 7 scheme will employ about 10,000 people, directly and indirectly.

He said all engineering work other than specialist cryogenic studies must be carried out in Nigeria, while fabrication of certain equipment will also take place in the country. A representative of the SCD consortium said at Wednesday’s LoI signing: “SDC is committed to deliver the project to Nigeria, with Nigerians in Nigeria.”

Assuming project sanction is taken this year, the new train could be up and running in 2023.

Located in Rivers State, the NLNG facility is controlled by state-owned Nigerian National Petroleum Corporation with a 49% stake, while Shell has a 25.6% interest, Total holds 15% and Eni is on 10.4%.

A Total spokesperson said at the LoI signing ceremony: “With Train 7, we will be the fourth biggest LNG supplier in the world. Total sees this as a key project in development of Nigeria.”

A Shell spokesman said the company “is pleased with the progress NLNG is making towards taking an FID on Train 7”.

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Saipem-led consortium bags Nigeria LNG train