It was a ground breaking event as Nigeria’s Liquefied and Natural Gas (LNG) Train 7 was flagged off recently by President Muhammadu Buhari after a Final Investment Decision (FID) agreement was reached and signed late last year by the consortium on the project, including NNPC, Eni, Shell and Total.
The long awaited $10 billion project is to boost Nigeria’s LNG output by 35 per cent. It will add around 8 million tons of the gas per year to increase the total output to about 30 million tons a year. The NLNG, experts say has been strategic to the country’s economic development, as it has generated over $114 billion in revenues, paying $39 billion as taxes and $18 billion as dividends to the coffers of the federal government over the years. And so, with the flag off and commencement of the construction of Train 7 by the operators, it is expected that more revenues would continue to accrue to the government, as it harnesses the over 600 trillion cubic feet of proven gas reserves the country is blessed with.
But as the country continues to celebrate the take-off of the Train 7, industry watchers feel that the government ought to pay attention to current global developments in the LNG industry, as LNG operations in the country cannot be isolated from them. One of such global developments is the Floating Liquefied Natural Gas (FLNG). This is a new technology gradually gaining momentum across the world as a development option to address the twin issue of security and lack of infrastructure that are bound to make onshore liquefaction very challenging. FLNG is principally developed to exploit remote or stranded gas resources in both shallow and deep waters as well as onshore fields.
Currently, Malaysia’s Petronas is the only operator, with two FNLG vessels, PFLNG Satu and PFLNG Dua, producing offshore at Sabah in East Malaysia and Kanowit field offshore Sarawak respectively. And the Anglo Dutch super major, Shell, has its FNLG Prelude unit offshore Australia producing about 3.6 million tons per annum while others are already exploring collaboration and partnership as a window to overcome the challenge of financing or funding the multi-billion-dollar project.
Speaking to our correspondent on this development, an energy expert Bala Zaka said “while we can’t but be happy that a new LNG train is been flagged off to increase the country’s LNG processing units, we must however not forget that a lot is happening globally as regards LNG that we can’t afford to neglect or be ignorant of. “No doubt, recent developments in global LNG call for prompt attention on the part of our government and others responsible for LNG development and operation in this country”.
He continued, “Just last week, I was at a digital event, which prime focus was on the future of Floating Liquefied Natural Gas. I must confess that I gleaned a lot from this event. Speaker after speaker highlighted the uniqueness of FLNG as an emerging technology that is going to sooner than later take the gas industry by storm.” Many of the FLNG contractors want to exploit opportunities in the growing LNG sector in Africa and Asia. The event was an eye opener for representatives of National Oil Companies (NOCs), International Oil Companies (IOCs) and other key players and stakeholders who participated in the event. They learnt so much from the experience gained by those who had deployed the FLNG technology.
“Many of them spoke about the need for collaboration and strategic partnership to optimize the success of future FLNG projects, as funding will be a major challenge in the execution of such projects, especially in some West African marine environments”. A particular FLNG contractor which is targeting projects with gas resources of between 2 trillion and 5 trillion cubic feet in West Africa (even assured of its ambitious plans to expand FLNG by complementing its technologies with innovative financing solutions that could help operators to exploit their gas assets. It said it is ready to help resource owners get access to financing but with the condition that the financiers are able to assess the potential investments before their commitment. Another contractor also promised to offer clients the potential for the production of carbon neutral LNG with a proposition to purchase the gas, liquefy it on FLNG unit and then sell the LNG to customers on a Free on Board (FOB) basis, he said”
At the moment, Africa is gradually becoming the destination point for FLNG as Eni’s 3.4 million tons per annum Coral Sul unit, which will be deployed offshore Mozambique, is currently under construction by Samsung Heavy Industries in South Korea. There is also, the BP’s 2.5 million tons per annum of the first phase Greater Tortue Ahmeyim (GTA) project, offshore Mauritania and Senegal being supplied by Golar LNG is being converted at Keppel Offshore& Marine in Singapore just as Exmar’s Tango FLNG too is primed to be redeployed in Africa.
With these prospective FNLG projects lined up for Africa, Zaka expects those responsible for LNG operations in the country to begin to evaluate the opportunities provided by FLNG, with the intention of taking advantage of them in this LNG development option.