NNPC, partners sign Nigerian content plan agreement

The Nigerian National Petroleum Corporation (NNPC) and its joint venture partners on Friday signed the Nigerian Content Plan agreement to move the country closer to the final investment decision (FID) on Train 7 of the Nigeria LNG project.

The agreement was signed between the NNPC, the principal partner in the project with 49 per cent equity (on behalf of the Nigerian government), and its partners, namely Shell (25.6 per cent), Total (15 per cent and ENI (10.4 per cent), and the Nigerian Content Development Monitoring Board (NCDMB).

The agreement was signed by the General Manager (Gas & Power), Saidu Mohammed, (who signed on behalf of the NNPC); the Executive Secretary, NCDMB, Simbi Wabote and the Managing Director/CEO, NLNG, Tony Attah.

Others who witnessed the signing were the representatives of Shell Petroleum Development Company (SPDC), Total Nigeria and ENI.

Potentials

The NLNG plant, which began with Trains 1 and 2 in 2000 has grown over the years to become a six train facility with about 22 million tonnes per annum (MTPA) production capacity.

The Train 7 project, estimated to cost of about $4.3 billion, is expected to expand the company’s production capacity and associated infrastructure to about 30 MTPA.

Mr Mohammed said the NNPC was excited the partners were about to move the project closer to the FID targeted at the fourth quarter of this year.

When completed, he said the project will reinforce Nigeria’s comparative and competitive advantage in the global LNG market and increase the country’s revenue and foreign investment profile.

He said the project will move Nigeria from being an oil-based to a gas-based economy ”to be reckoned with globally”.

The MD of NLNG, Tony Attah, described the Nigerian content plan as one for Nigeria’s manpower and economic development, which the company has identified with since it commenced operations 20 years ago.

Mr Attah said the NLNG has maintained a deliberate focus on Nigerian content development in all aspects of its operations, long before the enactment of the NOGICD Act 2010, to develop and harness local businesses, talents and potentials.

The NOGICD Act aims at encouraging more involvement of Nigerian firms in the operations of the oil and gas industry, particularly in engineering, fabrication, construction, installation, and commissioning services.

Exploits

The plan, he said, has helped the NLNG capacity development initiatives for indigenous companies providing services and materials for the plant construction and maintenance.

As part of NLNG’s commitment to promoting local content during the construction phase, he said some indigenous companies received support to boost their capabilities.

Some of the companies include Dorman Long Nigeria Limited and Niger Dock Nigeria Plc, to enhance their galvanising capability; Nexans Kabelmetal, to increase their low voltage electrical cables manufacturing capability, and Nigerian Foundries, to improve their processes for the manufacture of trench gratings and manhole covers.

He said the Nigerian Content plan enabled the NLNG to export Nigerian-made goods through the building of its latest six LNG carriers in South Korea.

Apart from the training of over 600 Nigerian youth in ship building, Attah said the plan also earned Nigeria foreign exchange and placed participating Nigerian companies, including Berger Paints PLC, Paints and Coatings Manufacturers Nigeria PLC and Nexans KabelMetal Ltd, Vina Furniture and I.O Furniture companies on the exporters’ list.

The signing of the Nigerian Content Plan for the Train 7 works, he said, will strengthen the NLNG’s commitment to further contribute to the advancement of growth in the Nigerian economy.

NLNG’s contributions

“After 19 years in operation, NLNG’s six trains plant has generated more than $100 billion in revenue and paid over $16 billion dividends to the Federal Government, through NNPC 49 percent shareholding.

“The company has also paid over $13 billion to the Federal Government for feed-gas purchases and $6.5 billion in taxes,” he said.

With the agreement, Mr Attah said the NLNG would want NCDMB’s support on Train 7 project to continue towards realising Nigeria’s aspiration to increase its gross domestic product (GDP) and diversify the economy by enhancing the ease of doing business.

In his remarks, Mr Wabote commended the NLNG for being the first operator in the midstream sector to sign the Nigerian Content Plan for the NLNG Train-7 project.

Mr Wabote said NLNG was also the first to implement the service level agreements (SLAs) concept introduced in May 2017 to help improve the Ease of Doing Business and cut down on the long tendering and contracting timelines in the industry.

Since the SLAs, he said the contracting timelines between the NCDMB and NLNG has improved, with several requests and approvals completed within 90 days, against the previous nine months duration.

The NCDMB scribe said the SLA aided the timely completion of the Nigerian Content Plan for the Train-7 project expected to ramp up NLNG’s production capacity by 35 per cent from 22 million tonnes per annum to 30 million tonnes per annum.

Benefits of content plan

The Train-7 Nigerian Content plan, Wabote explained, has provision for 100 percent engineering of all non-cryogenic areas in-country, totaling 55 percent man-hours, which exceeds the minimum level stipulated in the Nigerian Oil & Gas Industry Content Development (NOGICD) Act.

The construction of Train-7 of the NLNG project will deliver 100 percent in-country fabrication of the condensate stabilization unit, pipe-racks, flare system, and non-cryogenic vessels, apart from site civil works on roads, piling, and jetties.

“There will be 100% local procurement of all low and high voltage cables, all non-cryogenic valves, protective coatings, and all sacrifice anodes. About 70% of all non-cryogenic pumps and control valves will be assembled in-country.

“Other spin-off opportunities includes logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, and many more. With the increased number of trains in NLNG, there is also huge scope for local businesses to build capabilities in the maintenance of LNG plants especially in the area of cryogenics,” Wabote said.

At its peak production, he said the NLNG Tran 7 plant will provide direct, indirect, and induced employment of over 10,000 workers, apart from its capacity to attract other upstream gas supply projects.