NLNG Offsets $5.45b Loan, Generates $25b
By Modupe Gbadeyanka
The Nigerian National Petroleum Corporation (NNPC), Shell, Total and Eni have signed the Front End Engineering Design (FEED) contract of Train 7 of the Nigeria Liquefied Natural Gas Ltd (NLNG) on Wednesday in London.
The event also witnessed the commemoration of the successful repayment of $5.45 billion shareholders loan for Trains 1-6 by the NLNG Shareholders.
The NLNG T7 expansion project aims to increase NLNG production capacity from 22 MPTA to over 30 MTPA by the debottlenecking of T1-6 and the addition of train -T7 and associated infrastructure at an estimated cost of $4.3 billion. The target Final Investment Decision (FID) date is fourth quarter 2018.
Speaking at the occasion, NNPC Group Managing Director, Dr. Maikanti Baru, expressed the corporation’s readiness to support the Federal Government’s aspirations to actualizing Train-7 of project.
Jointly owned by the NNPC (49%), Shell (25.6%), Total (15%) and Eni (10.4%), NLNG’s successful journey started in 1999 with the commissioning of Train 2 ahead of Train 1 which was commissioned in 2000. The Company grew to a Six Train facility with the commissioning of Train 6 in 2007.
The company sourced a total principal amount of $4.043 billion from its shareholders in their respective shareholding proportions to partly fund the construction of Trains 1-6.
While the interest during the construction period was capitalised and added to principal for repayment from operational date of the financed trains, the total capitalised interest in the shareholders loan is $1.411 billion which, in addition to the total principal drawdown of $4.043 billion, accounted for the total loan amount of $5.45 billion repaid by the company.
The NNPC GMD said as 49 percent shareholder in NLNG, NNPC had immensely contributed to the success of the company over the years, supporting equity participation and contribution to shareholders loan.
“Through critical interface with relevant Government agencies, we have played a pivotal role in the actualization of Trains 1 to 6 (T1-T6). Given the success of T1-T6, NNPC is therefore fully committed and aligned with Government aspirations to replicate the success of this project. Therefore, our current focus is to kick start T7,” Baru noted.
Describing the NLNG as a jewel in the crown of Nigeria as well as a very strategic investment for the nation, Dr. Baru stated that the NLNG would continue to act as a catalyst for nation-building for years to come.
He said the prompt servicing of shareholders’ loan with accelerated repayments did not only demonstrate NLNG’s credit worthiness, it had also reiterated its robust financial position.
Dr. Baru, who lauded President Muhammadu Buhari and Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, for their support, also commended the tireless efforts of the various working teams – the Board and Management of NLNG as well as the Shareholders, the IOCs and the NNPC Finance & Accounts as well as Gas & Power Directorates for working hard towards achieving the feat recorded so far.
“Your sacrifices, faith in Nigeria and unflinching support in providing the required financing and technical support for the NLNG is commendable. It is our hope that this relationship opens a new vista of opportunities for all the Shareholders to play more active roles in the Midstream Oil & Gas business in Nigeria,” Baru added.
Dr. Baru described the company as a source of pride to the Government and people of the Country, the host communities, Shareholders, financial markets and several other stakeholders.
As at today, the GMD observed, the NLNG has generated revenues of more than US$25 billion to the Federal Government of Nigeria comprising Dividends of circa $17 billion and taxes of $7.2billion.