NLNG: a global company committed to building a better Nigeria
Nigeria LNG Limited a leading LNG company, has continued to show great support and loyalty to the Nigeria government’s policy on local content development and gas master plan project despite the harsh economic operating environment.
Interestingly, NLNG is the most significant arrow-head of the federal government’s quest to eliminate gas flaring and derive value from the country’s 187 trillion cubic feet of proven gas reserves.
Operating under a joint venture operation,. NNPC holds overriding 49 percent financial interest in the company while Shell Gas BV owns 25.6 percent operating interest. Also, Total has 15 percent in the company while Eni International N.V.S.a.r.l holds the remaining 10.4 percent interest.it has converted about 119 Bcm (billion standard cubic metres) or 4.2 Tcf (trillion cubic feet) of Associated Gas (AG) to exports as LNG and Natural Gas Liquids (NGLs), thus helping to reduce gas flaring by Upstream Companies from over 60% to less than 25%. Flares are only permitted in order to eliminate waste gas which cannot be converted to any further use. Flares also act as safety systems for non-waste gas and are released via pressure relief valves, when required, to ease the strain on equipment.
Ensuring to achieve its vision of becoming a global LNG company, NLNG, which was Incorporation in May 17, 1989, is celebrating its 30 years of existence as a corporate entity and 20 years of steady production with the theme” NLNG 20:30: celebrating success.
As a matter of fact ,NLNG has a world record in 2018 to be first worldwide in plant reliability. 98,4 percent And 4th world wide by market share.
Given the prime beneficiaries of the pioneer status policy of the federal government on gas monetization and flare reduction. NLNG mops up gas that would otherwise be flared, thus making significant contributions to the nation’s income, delivering in the last thirteen years over USD13 billion in dividends.
The company has paid over USD18 billion on gas purchases from oil producing companies, of which the Federal Government of Nigeria owns 55%-60%. Nigeria’s overall earnings from NLNG is now over 70%, comprising of the 49% dividend, 30% CIT, and other taxes.
According to NLNG Managing Director Tony Atta, NLNG’s corporate tax performance plus cash and non-cash contributions to the economy showed that the company stands tall as the biggest tax payer in Africa. It has remitted cumulative $40.47 billion or N14. 6trillion revenue to the government in the past 19 years.
From the monetization of gas hitherto being flared, NLNG has generated over $100 billion revenue since inception; paid over $36 billion to shareholders as dividends, and 49% of the total dividends goes to the federal government through the Nigerian National Petroleum Corporation (NNPC).
Also of the $28 billion paid to Joint Ventures (JVs) feedgas suppliers, some 58.8 percent of that amount goes to the federal government through NNPC. In 2018, NLNG paid government about $864 million in incremental CIT alone.
Other payments declared by the company include employee income tax, state and local government taxes, as well as regulators’ levies and fees totalling over N60 billion.
Out of corporate goodwill, NLNG has also voluntarily committed to about N222 billion social responsibility projects in Nigeria, assisting plug gaps and solving needs in areas where government is yet to reach with overstretched hands. The huge social assistance budget places NLNG as clear leader in Corporate Social Responsibility in Nigeria.
The company has spent over N25 billion on community projects over the years; it injected over N2.0 billion in building world-class engineering laboratories in six Nigerian Universities through the University Support Programme; it is spending N120 billion on the construction of Bonny-Bodo Road in Rivers State.
The NLNG signed an MOU with the Bonny Island community to provide N3.0 billion each year for 25 years for the overall development of the Kingdom.
It also currently provides uninterrupted power to over 200,000 inhabitants and businesses on Bonny Island, amongst other huge projects which include The Nigeria Prizes, NLNG University Scheme Programme, Micro-Credit etc.
On Vendor Finance Scheme, NLNG currently runs a USD 1 billion NLNG Local Vendors Financing Scheme (NLVFS) which facilitates access to funds from participating banks by NLNG-registered vendors (suppliers of goods or contractors of services). This way, vendors get speedy access to finance for their contracts, or procurement orders, at competitive rates.
With its plant construction, the company has generated considerable Foreign Direct Investment (FDI) for the country.
Giving Train 7 Project Status Update at the just concluded 2019 Nigerian Oil and Gas Conference in Abuja., Nigeria LNG, Manager, Nigerian Content, Charles Epelle, said the ongoing plans to reach a Final Investment Decision (FID) on its Train-7 project by fourth quarter 2019 will be the biggest game changer in gas project and make Nigeria the third World largest gas exporter.
Showcasing the Next Frontier of Catalytic Projects for new Business Opportunities with great Economic Impact , he noted that Nigeria is presently the fourth exporter of gas in the world. The NLNG has six operational trains (gas plants). The first train was built in 1989 but by 2007 till date, plans to build Trains 7 and 8 were shelved.
However, plans to invest seven billion dollars on the Train-7 project would expand its production capacity to 30 mtpa making Nigeria the 3rd largest exporter of gas in the World after Qatar and Australia.
He noted that the economic Impact of NLNG Train 7 is enormous which include LNG design and construction Technology Transfer to Nigerians, Measurable returns on investment to shareholder, leading to additional confidence for more investments.- dividends, CITA, etc., Increased capacity and capability of Nigerian Manufacturers and Service providers to meet international standards – vendor development, upgrades, and considerable collaboration with partners for future projects.
Other benefits are New businesses and opportunities for the Operations and Management of the existing and delivered projects, Sustained development in the value chain and value networks – Gas supplies, community empowerment, etc.
Epelle said the gas produced in Nigeria was world-class, adding that the NLNG had built a reputation of reliability in its gas supplies around the world.
According to the presentation the Train 7 project is projected to provide direct, indirect and induced employment for over 10,000 persons.
Also key Key Areas of Opportunities in T 7 include 10,000 personnel at site (at peak) on Bonny Island- > 80% Nigerians, 75,000 m3 Concrete, 150 Piles, 25,000 Te Structural Steel, 150,000m Piping, 10,000 Valves, 100 Heat Exchangers of several sizes, 1,000,000m Electrical Cables, 100000 bottles of Welding and inert Gases Cranage, Equipment leasing, professional services, etc
He explained that the expected job explosion from Train 7 is banked on the Nigerian Content Plan, which provides for 100 per cent engineering of all non-cryogenic areas in-country. The total in-country engineering man hours is set at 55 per cent, which exceeds the minimum level stipulated in the NOGICD Act, in line with the Board’s resolve to push beyond the boundary of limitations, he added.
He said that the Train-7 scope would deliver 100 per cent in-country fabrication of the Condensate Stabilisation Unit, pipe racks, flare system, and non-cryogenic vessels. Site civil works on roads, piling and jetties will keep local businesses occupied.
He added: “It will also provide great opportunities for utilisation of local goods and services in addition to enhancing and developing new capacities and capabilities for the local supply chain.
There will be 100 per cent local procurement of all LV cables and HV cables, all non-cryogenic valves, protective coatings, and all sacrifice anodes. Seventy per cent of all non-cryogenic pumps and control valves will be assembled in-country.” Other spin-off opportunities would include logistics, equipment leasing, insurance, hotels, office supplies, aviation and haulage.
He pointed out that the increased number of NLNG Trains would also provide huge business opportunities for local businesses to build capabilities in the maintenance of LNG plants, especially in the area of cryogenics.
The project would also catalyse other upstream gas supply projects required to keep the LNG train busy and make stranded gas fields in the shallow and deep offshore in the area economical.
Update on Train 7 Status indicates Nearshore Geotech Survey – 100 percent and SAFELY completed with over 50K Nigerian Manhours.
On the Pre-Load and Site Preparation Plant Interface Works: Plant permanent Fence Construction is 70 percent completed, New Drainage Construction is 75 percent, Site Reinstatement is 30percent while Settlement Monitoring is ongoing.
The Managing Director of NLNG , Tony Attah had already confirmed that the full value network of the Train 7 project was about $12bn, including the net cost of the project, estimated in the region of $4bn to $5 billion and a similar additional spend at its operational base in Bonny, Rivers State.
“It is also about the upstream development which is the real gas that will come to us. That also is a huge investment of $5 to $6 billion. So, potentially, the full value network is almost $12 billion.”
He further highlighted that the expected increase in the production capacity of LNG “will reinforce the company’s comparative and competitive advantage in the global LNG market while also increasing the country’s revenue and foreign investment profile. This is in addition to moving the nation’s economy from being oil-based to becoming a gas-based economy to be reckoned with globally. We are here to enable gas. Nigeria has ridden on the back of oil for more than 50 years; it is now time to fly on the wings of gas.”
Nigerian Content Development and Monitoring Board, NCDMB and the Nigeria LNG Limited, NLNG, signed the Nigerian Content Plan, NCP for the NLNG Train 7 project, taking a big step towards kick- starting the huge gas project that would create a flurry of activities in the oil and gas sector and contribute immensely to the nation’s economy.
This underscored that the Nigerian Content Plan for Train 7 contained clear and robust Local Content provisions that are significantly higher than the previous NLNG projects. “NCDMB and NLNG are fully aligned to collaborate during the operationalisation of the plan.
In Job Creation ,Nigeria LNG (NLNG) Limited provided more than 2,000 jobs each construction year. Overall, the major sub-contractors employed about 18,000 Nigerians in technical jobs in the Base Project.
Through each Nigerian Content plan for its contracts, NLNG has promoted the development and employment of Nigerian manpower. For instance, six hundred (600) Nigerians will be trained in Nigeria and at the contractors’ (Hyundai and Samsung) shipyards in Korea as part of the Nigerian Content deliverables tied to the construction of six new LNG vessels by Bonny Gas Transport (BGT), a wholly owned subsidiary of NLNG.
Those six hundred Nigerians, with enhanced skills in welding, hull assembly, pipe fitting, electrical, mechanical, painting and ship design will join the country’s workforce, providing a support base for technology transfer and industrialization.
Thirty-five of the Nigerian trainees are currently in Korea for participation in the ship construction and six Nigerians are already working as ship managers (two Production Managers, two QA/QC Managers and two HSE Managers) in the ship construction at the shipyards in Korea.
As a big contributor to Local Content Development, NLNG supports the development of community and Nigerian contractors to enable them achieve standards of excellence.
In its host community, through the initiative to empower local contractors via the Finima Legacy Project, local contractors have made capital investments in their companies thereby expanding their operating capacity. The capabilities of local vendors have also been developed through mentoring and engineering of partnerships between the more established Nigerian vendors and the community vendors.
In domestic LPG supply NLNG commenced the supply of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas to the domestic market in 2007 when refineries became challenged and supply was grossly inadequate. Since then, the issue of inadequate supply has become a thing of the past.
The intervention, which is in line with company’s vision of helping to build a better Nigeria, has significantly contributed to the stimulation and development of the domestic LPG market in Nigeria and has effectively brought down the price of cooking gas from over N7,000 in 2007 to less than N3,500 per 12.5kg cylinder today.
NLNG is committed to delivering 350,000 tonnes of LPG into the Nigerian market annually and has signed Sales and Purchase Agreements (SPAs) with fifteen off-takers (all Nigerian companies) for the lifting of LPG for the domestic market.
from UGO AMADI, Champion Newspapers
