By Adedapo Adesanya
The Nigeria liquefied natural gas, LNG, has signed the engineering, procurement and construction (EPC) contract for Train 7, its major gas expansion plan.
Minister of State for Petroleum Resources, Mr Timipre Sylva, made this disclosure on Wednesday.
According to the minister, the long-awaited project is expected to boost Nigeria’s liquefied natural gas (LNG) output by more than 30 percent.
Mr Sylva, during a virtual event on Wednesday noted that, “The construction phase of Train 7 can now commence in earnest.”
Nigeria LNG had previously announced that it would award the EPC to a consortium including Italy’s Saipem, Japan’s Chiyoda and Daewoo of South Korea.
In a statement, Saipem said the overall value of the contract was above $4 billion, with its share at roughly $2.7 billion.
NLNG is a consortium between national oil company, Nigerian National Petroleum Corporation (NNPC) and energy companies such as Eni, Total, and Royal Dutch Shell.
They signed its final investment decision on the Train 7 processing unit late last year.
Nigeria is rich in oil and gas but has been struggling to boost its output of both resources. Its LNG production has been steadily falling in recent years.
The Train 7 expansion comes at a difficult time. LNG prices in Asia and gas prices in Europe have hit record lows as the coronavirus pandemic worsened already weak demand.
Some buyers have cancelled cargoes as a result, and there are currently more than a dozen vessels carrying LNG searching for buyers, seven of them from Nigeria.
On this, Mr Sylva and NNPC managing director, Mr Mele Kyari, said the Train 7 is a five-year project, giving demand time to rebound.
They also said it was key to Nigeria economic recovery from the pandemic which has faced a high level of loss due to falling global trade.
“Unless projects like this go on, the economy will not improve,” Mr Sylva said.
Dipo Olowookere