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NLNG issues Train 7 EPC contract letter of Intent to SCD JV consortium



Why we chose Obasanjo to present literature prize – NLNG

…As OPEC cuts 2020 oil demand forecast, urges effort to avert new glut***

Nigeria LNG Limited on Wednesday made a significant step toward the Final Investment Decision (FID) for its Train 7 Project.

This followed the issuance of a Letter of Intent for the Engineering, Procurement and Construction (EPC) contract of the project to SCD JV Consortium.

Mrs Eyono Fatayi-Williams, the company’s General Manager, External Relations, said in Lagos that the contract letter was issued recently in Abuja.

The SCD JV Consortium is made up of Saipem of Italy, Japan’s Chiyoda and Daewoo of South Korea.

Fatayi-Williams said the issuance was coming on the heels of the Nigeria Content (NC) plan signed with the Nigerian Content Development Monitoring Board (NCDMB).

She said this also tilted on the Sept. 3 NLNG,’s submission of the summary outcome of the commercial bids evaluation for the “Train 7 Project’’ to NCDMB in line with the project certification and authorisation procedure.

According to her, the letter of intent is one of the significant step toward the realisation of “Train 7’’ and its attendant value to NLNG’s shareholders and for the benefit of the Nigerian economy.

Fatayi-Williams said the contracting process was transparent and in full compliance with all applicable laws and good industry practices.

She said that it would continue to operate its business in an open manner consistent with its core values of integrity and excellence.

Fatayi-Williams said the “Train 7 Project’’ was expected to ramp up NLNG’s production capacity by 35 per cent from 22 million Tonnes per Annum (MTPA) to around 30 MTPA.

She said the project would form part of investment of over 10 billion dollars, including the upstream scope of the LNG value chain, thereby boosting the much needed Foreign Direct Investment (FDI) profile of Nigeria.

“The project is anticipated to create about 10,000 new jobs during the construction stage, and on completion, help to further diversify the revenue portfolio of the Federal Government and increase its tax base.

She said that this was in line with its corporate vision of “Helping to build a better Nigeria”, adding that the construction period after FID will last approximately four to five years.

Fatayi-Williams said that the actualisation of the “Train 7 Project’’ comes as NLNG celebrates 30 years of its incorporation and 20 years since exporting its first LNG cargo in 1999.

NLNG is owned by four Shareholders: the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (49 per cent), Shell Gas B.V. (25.6 per cent), Total Gaz Electricite Holdings France (15 per cent), and Eni International N.A. N. V. S.àr. l (10.4 per cent ).

Meanwhile, OPEC on Wednesday cut its forecast for growth in world oil demand in 2020 due to an economic slowdown, an outlook the producer group said highlighted the need for ongoing efforts to prevent a new glut of crude.

In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) said oil demand worldwide would expand by 1.08 million barrels per day, 60,000 bpd less than previously estimated, and indicated the market would be in surplus.

The weaker outlook amid a U.S.-China trade war and Brexit could press the case for OPEC and its allies to maintain or adjust their policy of cutting output.

Iraq said ministers would on Thursday discuss whether deeper cuts were needed.

OPEC, in the report, lowered its forecast for world economic growth in 2020 to 3.1 per cent from 3.2 per cent and said next year’s increase in oil demand would be outpaced by “strong growth” in supply from rival producers such as the United States.

“This highlights the shared responsibility of all producing countries to support oil market stability to avoid unwanted volatility and a potential relapse into market imbalance,” the report said.

OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut output by 1.2 million bpd.

The alliance, known as OPEC+, in July renewed the pact until March 2020 and a committee reviewing the pact meets on Thursday.

Oil prices LCOc1 pared an earlier gain after the report was released to sit just below 63 dollars a barrel. Despite the OPEC-led cut, oil has tumbled from April’s 2019 peak above 75 dollars, pressured by trade concerns and an economic slowdown.

The report said oil inventories in industrialized economies fell in July, a development that could ease OPEC concern over a possible glut.

Even so, stocks in July exceeded the five-year average – a yardstick OPEC watches closely – by 36 million barrels.

OPEC and its partners have been limiting supply since 2017, helping to clear a glut that built up in 2014-2016 when producers pumped at will, and revive prices.

The policy has given a sustained boost to U.S. shale and other rival supply, and the report suggests the world will need less OPEC crude next year.

Demand for OPEC crude will average 29.40 million bpd in 2020, OPEC said, down 1.2 million bpd from this year.

OPEC said its oil output in August rose, however, by 136,000 bpd to 29.74 million bpd according to figures the group collects from secondary sources.

It was the first increase this year. Saudi Arabia, Iraq and Nigeria boosted supply.

Top exporter Saudi Arabia told OPEC that the kingdom raised August output by just over 200,000 bpd to 9.789 million bpd.

Saudi Arabia continues to pump far less than its quota of 10.311 bpd.

READ MORE…NLNG vs NIMASA: Deconstructing the N126bn feud

Thanks in part to Saudi restraint, producers are still over-complying with the supply-cutting deal. Losses in Iran and Venezuela, two OPEC members facing U.S. sanctions, have widened the supply reduction.

August’s increase, however, puts OPEC output further above the 2020 demand forecast.

The report suggests there will be a 2020 supply surplus of 340,000 bpd if OPEC keeps pumping at August’s rate and other things remain equal, more than the surplus forecast in last month’s report.

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Nigeria, Germany Sign $500m Renewable Energy Pact, Gas Export Agreement



Nigeria and Germany have signed two Memoranda of Understanding (MoU) on the supply of gas from Nigeria to Germany and another $500 million worth of renewable energy projects in Nigeria

A statement by presidential spokesman, Ajuri Ngelale, said President Bola Tinubu witnessed the signing of the two MoUs on the sidelines of the 10th German-Nigeria Business Forum on Tuesday in Berlin, Germany.

The signing is part of the burgeoning economic partnership between Nigeria and Germany as well as a further expansion and strengthening of their bilateral ties.

The agreements are between Riverside LNG of Nigeria and Johannes Schuetze Energy Import AG of Germany on the gas export partnership, while the other is between Union Bank of Nigeria and DWS Group on cooperation in renewable energy.

CEO of GasInvest, Mr David Ige, who signed the MoU on gas supply, said the Riverside LNG project aims to supply energy from Nigeria to Germany, extinguishing about 50 million cubic feet per day of flared gas in Nigeria.

”The project will supply energy from Nigeria to Germany at 850,000 tonnes per annum, expanding to 1.2 million tonnes per annum.

”The first gas will leave Nigeria for Germany in 2026, and there will be further expansion.

‘’This will extinguish about 50 million cubic feet per day of flared gas in Nigeria and open alleyways of new and greater exports of gas to Germany,’’ he said.

The German partners expressed confidence in investing in Nigeria’s gas sector.

Chief Operating Officer of Johannes Schuetze Energy Import AG, Mr Frank Otto, described the partnership as a “big deal” for the German market.

Chairman of Union Bank, Mr Farouk Gumel, disclosed the commitment of $500 million for e-energy projects in Nigeria, emphasizing the importance of rural inclusion and bringing more people into the formal economy.

”We believe this would bring rural inclusion and capture more people into the formal economy. Without inclusion, there is no growth. Thank you, Mr President,” Gumel said.

Welcoming the new deals, Tinubu assured German businesses that with Nigeria’s stable political landscape, foreign investments into the country are secure.

He said, ”Since 1999, we have witnessed changes in democratic governance, with peaceful transfers of power within and between parties. Democracy in Nigeria has proven to be flexible and resilient.

‘’Shake off any remnants of the military era syndrome; we have moved beyond that. Despite challenges faced by other African nations, Nigeria stands firm, and we are your partners.”

Outlining some of the achievements of his administration, which include his globally acclaimed economic reforms, Tinubu emphasized his commitment to sustaining the reforms and building stronger Nigerian-German relations.

He added, ”For those who fear various obstacles; look at me—I come from the private sector, trained by Deloitte. I served as the treasurer in Exxon Mobil.

”Define corporate governance in any way, and I am in it. I governed Lagos for eight consecutive years.

‘’Today, I can proudly beat my chest that Lagos State is on the horizon and the fifth-largest economy in Africa, rising from ground zero. This is the track record that led me to the presidency.

”Nigerians voted for me for reforms, and from day one of my inauguration, I implemented the reforms. My inaugural speech did not disclose what I would do.”

According to Tinubu, he removed the fuel subsidy that was a great burden to Nigerians from the moment he stepped into office.

”The arbitrage regime is gone forever. Now, you can bring your money in and out as you wish. If you encounter any problems, rest assured that I have built one of the most reliable teams Nigeria has seen to address them.

‘’I appeal to you to forget the past and focus on building a relationship that removes obstacles, fostering progress and prosperity in Nigerian-German relations.

”You can rely on us; we can rely on you; both of us can chorus Hallelujah at the same time,” the president said.

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$321m: Reps Summon CBN, DISCOs, Contractors over alleged Misuse of Electricity Projects Loans



…Funds were transferred as repayable loans directly to the DISCOs by CBN for execution of various projects***

The House of Representatives Public Accounts Committee has summoned the Central Bank of Nigeria (CBN) and 11 Electricity Distribution Companies (DISCOs) in connection with alleged mismanagement of the US$321 million and N18.2 billion loans.

The loans were designated for accelerated transmission and distribution interface, lines, and substation projects.

Rep. Bamidele Salam, Chairman of the Committee, issued the summons during the appearance of Engr. Sule Abdulaziz, Managing Director, Transmission Company of Nigeria (TCN), before the committee in Abuja on Thursday.

These entities were asked to appear before the committee on November 8.

The investigation was prompted by a petition regarding the alleged misuse of funds, which had been disbursed to the DISCOs by the CBN at the request of the TCN.

Salam demanded detailed information regarding the loan disbursements, procurement processes, the involvement of DISCOs in the projects, the current status of the projects, and the loan repayment structure from the beneficiaries.

Salam emphasised the importance of ensuring that public institutions adhere to the law and international best practices while ensuring the judicious utilization of funds.

Appearing before the Committee, Abdulaziz clarified that the funds were transferred directly to the DISCOs by the CBN for the execution of various projects, with the intention of repaying the loans using TCN’s revenue.

However, this repayment arrangement has raised concerns within the committee.

He explained that there was a gap in the electricity sector, leading to complaints from distribution companies regarding the inadequate supply from TCN.

He said, consequently, the need arose to invest in critical projects to enhance the distribution of electricity to Nigerians.

According yo him, the Financial institutions and regulatory bodies, such as CBN and NERC, were involved in the financing and oversight of these projects.

He said the TCN played a beneficiary role, while the DISCOs were responsible for executing the projects.

He added that loan repayments were intended to come from TCN’s revenue, amortized on a monthly basis.

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AUTOPSY: Reps Committee Plans Audit Of Petrol Subsidy Regime



The House of Representatives Committee on Petroleum Resources (Downstream), says it plans to conduct a comprehensive audit of the subsidy regime of the Premium Motor Spirit (PMS) in the country.

Rep. Ikeagwuonu Ugochinyere, the Chairman, said this at the committee’s inauguration in Abuja on Friday.

He said that the committee’s legislative priorities included ensuring energy security, enhancing professionalism in the petroleum sector, and driving economic transformation.

Others, he said, included fostering accountability, institutional reforms, and focusing on revenue recovery and generation.

‘‘The committee’s specific objective is to assist the Federal Government in recovering the 20 billion dollars in revenue lost in the sector.

He said the committee would also prioritise early remittance of federal revenues and the recovery of unremitted funds in the coming days.

Ugochinyere emphasised the importance of addressing the challenges faced by Nigerians due to the removal of the subsidy on petrol.

He said the committee also plans to probe the subsidy beneficiaries, scrutinise loan transactions and pre-export financing arrangements, and review loans related to crude oil.

The lawmaker said the committee would examine the direct sales, and direct purchase method, which he said involved using crude for importing refined petrol and other associated value chains.

He said the committee would collaborate with other relevant committees in the upstream, mainstream, gas, and petroleum training fund sectors to achieve its objectives.

Reps Queries $10.7bn gas-to-liquids Project; NNPCL deactivates 395 illegal refineries over Crude theft

*The Green Chamber

In reviewing the PIA, he said the committee plans to assess the actions taken before and after its implementation, the status of national assets, and the achievement of energy security.

He also said the committee would examine competition in the downstream sector, as originally intended in the PIA.

Ugochinyere said that the committee would also address the issue of NNPCL being the primary petrol importer, contrary to the PIA’s vision of diverse downstream operators.

He said the committee would address the challenges related to domestic crude supply for modular refineries and local refineries, which is a constitutional provision under the PIA.

‘’The committee will also ensure adequate supply of domestic crude to achieve energy security,’’ he said.

Ugochinyere expressed confidence in the committee’s ability to fulfill its mandate and urged stakeholders in the petroleum sector to cooperate in the discharge of its functions and embrace positive changes.

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