The Federal Government said it has signed agreement with Greenville Energy and the Nigerian National Petroleum Corporation/Total Exploration and Production Nigeria, TEPNG, Joint Venture for the construction of a $500 million mini-Liquefied Natural Gas facility in the country to increase domestic gas supply and boost supply to power plants.
Speaking during the signing of the Memorandum of Understanding for the Gas Sale and Aggregation Agreement in Abuja, Minister of State for petroleum Resources, Mr. Ibe Kachikwu, said the agreement would allow the movement of gas across the country, especially in the absence of adequate pipeline network.
He further stated that the agreement would unlock existing opportunities in terms of gas supply to power companies. He said that the Federal Government would address the challenges of payments by ensuring that payments are made promptly for gas supplied under the arrangement.
He said that the initial capacity of the mini-LNG project is 2,200 met6ric tonnes and has the capacity to grow to about 5,000 metric tonnes. He said with agreement like this, the Federal Government was looking at increasing gas supply to the northern part of Nigeria, where a number of industries are closing shop because of the absence of electricity.
Also speaking, Group Managing Director of the NNPC, Mr. Maikanti Baru, said the agreement would allow it increase its gas output to 1.4 billion standard cubic feet (BCF) with plans to increase it to 1.6 billion SCF in the months ahead. Baru, who was represented by the Managing Director, Gas and Power Investment Company, Mr. Sam Ndukwe, said NNPC would create the enabling environment for the project to succeed by building more pipeline and increase access to gas supply, adding that it is also in line with its plans to increase its power generation target from one gigawatts to six gigawatts.
Speaking in the same vein, Mr. Eddy Van Den Broeke, Chairman, Greenville Oil and Gas Limited, said phase one of the project, which would be situated in Rumuoji, Rivers State, will commence with three trains, with a capacity of 2,200, stating that there are plans to construct eight trains going forward. He said that the firm has decided to invest in the first three mini LNG plants in Africa, saying that the big challenge today is that no bank is willing to finance the investment because of the temporary problems that Nigeria is going through.
“We have taken the bold step in saying this country will come back in the next two or three years with the revolution that is going on in the country. It will allow Nigeria to get back to a stronger financial position again. Our project is done with Total Gas, local gas coming from Obite. That means no need for foreign exchange.”
He said the total outlay of the investment is around $500 million in the first phase, and plans to increase it to about $850 million, completely on equity without any bank financing. “We hope that in the second phase, as the minister has said, more assistance will be given once the people see the investment and the product comes to the market. He said that given the opportunity, the company would supply gas to the NNPC headquarters, National Assembly complex and the Presidential Villa among others, to ensure stable power supply in these complexes.
He said, “When it comes on stream, the project would create about 1,000 direct jobs and 5,000 indirect jobs; help stop the depletion of the country’s foreign exchange reserve, preserve the environment and; revive the economy of Nigeria.”
Giving a background to the agreement, Managing Director of the Gas Aggregation Company of Nigeria, Mr. Morgan Okwuche, said that in the in the statutory discharge of its responsibilities, GACN issued a Gas Purchase order (GPO) to TEPNG JV and Greenville on 27th November, 2014 for gas supply of 74 million standard cubic feet per day (MMscf/d) to the phase-1 of Greenville’s Mini-LNG plant in Rumuoji. Rivers State.
He said, “The execution of this Agreement, the 29th of August, 2017 will usher in the era of virtual pipelines in Nigeria. The Virtual pipeline system is coming at a time when the traditional pipeline system has become endangered, due to incessant pipeline vandalism and other daunting challenges faceing the country. “Greenvilie will transport the products with specialised LNG trucks, which have the capacity to travel about 1,000km on LNG before re-fuelling.
Liquefied Natural Gas (LNG) is Lighter, Cheaper and safer when compared to AGO and will as such have less impact on Nigerian Roads during transportation to the locations of their various Customers.”
He added that the agreement would give a major boost to Embedded Power generation in Nigeria, noting that areas that are not easily accessible by the traditional pipelines, can now be reached through Virtual pipelines for embedded power generation, which will further aid Government’s resolve to ensure an efficient Energy mix in the Nation’ s power sector.
“The project when commissioned will give a boost to the development of Compressed Natural Gas (CNG) as a vehicular fuel. Similarly, LNG fueling stations for LNG trucks mil spring up, giving rise to a combined filling stations to be built along the Nigerian highways, to ensure trucks can re-fuel when required,” he added.
