Adewale Sanyaolu in Barcelona, Spain
The Nigerian Liquefied Natural Gas Limited (NLNG), on Tuesday, said it has secured guarantees for gas feed supply and off takers for its planned $7 billion Train 7 project.
In the build-up towards Final Investment Decision (FID) later in 2018, Nigeria LNG Limited (NLNG)is seeking $7 billion from the global financial markets for the sustainability of its operations and expansion project which will increase its production capacity from 22 million tonnes per annum (MTPA) to 30 MTPA.
Chief Executive Officer (CEO), NLNG, Mr. Tony Attah, disclosed this in a chat with reporters on the sidelines of the on-going Gastech conference and exhibition in Barcelona, Spain.
“In terms of volume off-takers for Train 7, we are not struggling because we have guaranteed market for it,” he assured.
Attah added that while the Sales Purchase Agreements (SPAs) are still valid, they may not hesitate to take a second look at it if need be without necessarily changing the off-takers.
He said that the company has made progress on guaranteeing gas supply for the upcoming Train 7 with companies including; Shell, Total and Eni committing to ensuring steady supply of gas feedstock for the project.
“All the volumes anticipated for Train 7 would be coming from our shareholders gas suppliers. We are analysing data books on how much gas would be needed and to know where all the supplies will be coming from. In the next couple of weeks, we will sign off that agreement”, Attah said.
The NLNG CEO explained that Train 7, an 8 million tonnes per annum (MTPA) capacity project, has made a lot of progress towards securing the final investment decision (FID), but cannot give the specific date when the milestone will be attained.
According to him, the FID cannot be taken until the completion of the dual front end engineering design (FEED) which was awarded in July this year to a consortium of B7 JV consortium and SCD JV consortium.
The upcoming Train 7, which he described as a jumbo project, is a two-train project combined as one, already has in place existing sales purchase agreements (SPAs) in place.
He said that there is more clarity on the funding strategy to be deployed for the project which will be a mixed financing model with multiple inflows as they are not expecting the entire $7 billion required for the project to come from one source.
He explained that financial advisers have been appointed with GT Bank emerging as the local bank and SNBC.
On the re-marketing of existing Trains 1 – 3 whose long term contracts will expire around 2021, the NLNG chief executive said that that they have made tremendous progress and the market has been positive and responsive to the re-marketing effort.
He acknowledged that the re-marketing effort is not focused on any specific geographic region, explaining that, it will be a mix of medium to long term contracts of between 10 to 15 years but with the overriding interest of “flexibility meeting value”.