Former Head of State Chief Ernest Shonekan yesterday urged President Goodluck Jonathan to approve the Train 7 of the Nigeria Liquefied Natural Gas project.
Shonekan spoke when he visited the NLNG Plant in Finima, Bonny Island , Rivers State .
The former Head of Interim National Government (ING) said the country is losing its leadership position in the LNG market to countries such as Australia and the United States.
He said: “This is why I call on the President to immediately order the acceleration of these gas projects in the interest of this country. Train 7 is a low hanging fruit. I urge the government to immediately pursue that. “From the stand point of investment: it will cost Nigeria nothing; it will be built with third party loans. Nigeria LNG Limited has solid credit ratings and can raise funds with relative ease. “From the stand point of economics: Train 7, like its predecessors, is viable; it is all plus and no minus for Nigeria . It will bring in Foreign Direct Investment (FDI) estimated at over USD$8 billion and contribute significantly to reduction of flared gas, while further monetising Nigeria’s gas resources and improving the country’s revenue profile. “From the stand point of employment generation: Train 7 will provide about 10,000 jobs for Nigerians, and particularly the youths in the Niger Delta. Since it opened shop in Bonny, Nigeria LNG Limited has provided more than 2,000 jobs each construction year and 18,000 jobs at the peak of construction. The sequential nature of the project ensures that labour force is retained over the years.
“Nigeria no longer has the luxury of deferring major decisions or of picking and choosing developmental projects to do and in what order. The LNG market is tightening. Other nations are not staying idle, as the following shows: “The United States , formerly a major LNG export destination, will become a net LNG exporter by 2016, starting at 1.1 billion cubic feet per day and rising to 2.2 bcf/d in 2019. “ Australia has 10 fully sanctioned LNG projects with a total of 20 trains, 81 million tonnes per annum (mtpa) of capacity and USD$215 billion worth of final investment decision. “ China and US will soon become major exporters of gas. Chinese reserves are estimated at 1,275 trillion cubic metres. “ Mozambique will next year take a final investment decision to build a two-train facility for its recent gas finds offshore Mozambique.”
Australia has only 60 per cent of Nigeria ’s gas reserves. Yet, the country is building LNG plants with capacity for 80 million metric tonnes. And what is more? Australia generates 265,000 mega watts of electricity. Certainly, we can do more; we should do more and we must do more.”
Chief Shonekan added: “I am glad that Brass LNG is about to take Final Investment Decision for 20 million metric tonnes and OK LNG is in consideration for 2014. These efforts are however grossly inadequate. With more gas reserves than Australia, we can’t constrain ourselves to less than half of their output. Also, it is almost a shame that with more gas reserves, we produce less than 5,000 mega watts of power compared to Australia’s 265,000 mega watts.
“I find it unacceptable, the argument that gas export should wait for gas to power projects. With a gas reserve of 187 tcf, there is more than enough gas for every project in Nigeria . It must also be noted that domestic gas and export gas are not in competition. We must also prove to the world that we are a country that is capable of doing more than one project at a time. We are competent adults capable of taking right decisions and making the right investments for our future. He went on: “ For Nigeria , the case for having a Liquefied Natural Gas project had a daunting number of challenges despite the country’s enormous gas reserves estimated at more than 160 trillion cubic feet. Among the challenges at the commencement of the project were lack of political will, reputation as corrupt in the comity of nations and lack of qualified and experienced people to cater for the industry’s operations professionally, and so on. “Indeed, what has surprised keen observers of the industry has been the exponential rate at which this company has grown.
The success which greeted the Nigeria LNG Limited’s project had accelerated the execution of plans, now at an advanced stage, for the building of the seventh train. Two other LNG projects – Brass LNG and OK LNG – are also being contemplated. From Nigeria LNG Limited, the government which still has oil as its major foreign exchange earner has reaped over USD $9 billion as dividends. “With the success of Nigeria LNG Limited on Bonny Island , doubts about Nigeria ’s capability to successfully see a project from construction to operation have now paled into insignificance. Also, doubts about Nigeria LNG Limited’s ability to grow and expand have been similarly wiped out by its glowing records of achievements of prompt delivery and of meeting its contractual obligations to its numerous customers around the world.
“The question now is will it be able to reach its full potentials and also remain a beacon to the rest of Africa ? “Starting out with a Base Project of only two trains which had a capacity for about six metric tonnes of LNG per annum, the Nigeria LNG project grew in less than a decade of production to a six-train operating plant producing 22 million tonnes of Liquefied Natural Gas per annum with progressive plans for a seventh train intended to raise production to about 30 million tonnes of LNG. “The LNG market has also undergone some diversification. NLNG opened up by initially concentrating most of its exports to Europe with buyers in France, Portugal , Spain , Italy and Turkey . Later, it broadened its scope to deliver long-term sales to North America , which in the past was primarily a destination for only your spot cargoes.
“The LNG market has radically changed so much so that it is now ridiculous to talk about Atlantic and Pacific markets – the old divisions on which this industry was founded’’.