With the ongoing construction of six additional liquefied natural gas (LNG) ships for the Nigeria LNG Limited (NLNG) expected to be concluded by the end of 2016, Nigeria’s effort to consolidate its position as one of the largest exporters of LNG in the world is taking shape.
Steel cutting on the first of the project’s LNG carriers took place on April 25, 2014 at Samsung Heavy Industries’ (SHI) Geoje shipyard in South Korea, according to Braemar Engineering, the specialist maritime engineering consultancy appointed to act as shipping consultants to Bonny Gas Transport Limited (BGT), the wholly-owned subsidiary of NLNG responsible for transporting NLNG’s output over the Atlantic to Europe and the Americas.
Braemar Engineering will oversee the building of the six LNG carriers, from design to delivery, with completion of the project anticipated at the end of 2016.
NLNG had in 2012 said it would seek funding to expand its shipping subsidiary BGT, which currently has 24 LNG ships. Last year, BGT ordered six new vessels at the cost of $1.6 billion from both Hyundai Heavy Industries (HHI) and SHI to boost its shipping capacity. Four of the vessels are being built by Samsung and two by Hyundai.
“The inception of this project began nearly 12 months ago, and we are pleased to now be in a position to make details known to the marketplace,” Geoff Green, chief executive officer, Braemar Engineering, said last week.
“This project is the fusion of Braemar Engineering’s expertise in the LNG sector with Nigeria LNG’s core values of integrity, teamwork, excellence and caring for people to create a long-term partnership offering benefits to both the industry and to the Nigerian community,” he said.
NLNG Limited, which recently exported its 3,000th cargo of LNG from its Bonny Island terminal, is planning to expand plant capacity by 40 percent by building a new production line at a cost of around $15 billion. The company plans to refurbish existing plants as it seeks to produce around 40 million tonnes of LNG each year in the foreseeable future.
“NLNG intends to consolidate its position as one of the largest producers and exporters of LNG in the world, maintaining its position as a major and strategic supplier. Currently, NLNG delivers some 8 percent of the world’s LNG supply,” the company said in its ‘Facts and Figures on NLNG 2013’.
Already, the shale gas boom in the United States (US) has impacted on the country’s LNG exports as imports of LNG from the US have dropped significantly.
Industry analysts have said that Nigeria’s share of the LNG market could significantly fall as the increasing availability of LNG from US and East Africa reaches into the Asian region, the top destination for the fuel, stressing the need for Nigeria to intensify efforts to attract long-term buyers.
Emeka Duruigbo, oil and gas professor, Thurgood Marshall School of Law, United States, who was in Nigeria recently, told BusinessDay that with the shale gas revolution occurring in the US right now, Nigeria was almost disappearing from the radar, such that it might not even get any supply orders from the US.
“But Nigerian gas will still be needed, but it means it has to start looking for new markets, get closer to China, India, all these emerging economies that need more energy, but that’s more work and some of those people may not have the purchasing power the way the US has to pay and so Nigeria may have to start selling at a discount,” he said.
In fulfilment of Nigerian Content Development activities agreed between BGT and HHI as contained in the contract for the construction of two new LNG carriers for BGT, 180 Nigerians would be trained in different aspects of ship building and construction, said NLNG, adding that of the 180 technicians travelling to South Korea for the three-month programme, the best 28 would remain to join in the construction of the six new vessels.
NLNG has long-term supply contracts with buyers in Italy, Spain, Turkey, Portugal and France and also sells on-the-spot market to buyers in Japan and South Korea, among others.
Nigeria, Africa’s top oil producer and world’s fifth biggest LNG exporter, currently has LNG production capacity of 22 million metric tonnes per annum (mtpa) and is expected to ramp up when a seventh train comes on stream. The Train 7, which is still awaiting final investment decision (FID) by the stakeholders, is expected to lift the total production capacity to 30 mtpa.
The country holds the largest natural gas reserves in Africa but has limited infrastructure in place to develop the sector. Uncertainties in Nigeria’s investment policies and regulatory framework are said to have caused a slowdown in oil and gas exploration activity and delays in project development, including LNG projects.
Nigeria, which is home to the world’s ninth biggest gas reserves and one of the world’s largest LNG export terminals, in 1989 established the NLNG to harness the nation’s vast natural gas resources and produce LNG and natural gas liquids for export.
Source:- businessdayonline.com
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