NLNG AND THE NIGERIAN ECONOMY
The Nigeria LNG project is considered one of the most important economic projects being carried out in Nigeria. The project is a vital part of the Federal Government's diversification programme and has already generated significant revenues and foreign exchange for the nation.
Overall, the major sub-contractors employed about 18,000 Nigerians in technical jobs in the base project. These jobs attracted about 500 expatriates who played mainly supervisory roles during the base project. These Nigerians, with enhanced skills of their trades will be entering the Nigerian industry. This is one of the veritable routes of technology acquisition through the project into the Nigerian economy. The Third Train expansion project employed about 7000 personnel at its peak.
The greatest impact of the project has been on the host communities of Bonny Island particularly in the areas of housing, catering and transportation. These sectors enjoyed a boom as a result of close to 90 million Naira that entered the economy monthly during the construction phase. In addition, a number of service industries were attracted to the Island notable among which were catering, Joint Venture Companies in the area of equipment and spare parts manufacturing. The considerable financial transaction could be witnessed by the number of banks that were attracted to the Island. One of the banks hit a record of four corporate and 30 individual customers within the first two weeks of its operations despite the requirement of 20,000 Naira (USD200) minimum deposit for current accounts and 10,000 Naira (USD 100) minimum deposit for savings accounts. This was, then, a feat unmatched anywhere within the country.
NLNG and its shareholders agreed on a Nigerianisation scheme on September 1, 1997. This was revisited and updated in 2004. The objective of the scheme is to Nigerianise the company's workforce by 2013.
The company adopted the bottom-up approach to the implementation of the scheme. It started by recruiting young OND/HND graduates and training them as technicians and operators. Young graduate engineers were also recruited and are still being recruited. This is a deliberate policy predicated on the need to enable the relatively young minds to imbibe the culture of work, discipline and professionalism that the business requires.
NLNG also instituted a staff training and development drive for different cadres of technical staff. This is to inculcate in them the requisite skills and competence for management, supervisory and operational positions throughout the company.
Significant progress has been made with the employment of Nigerians in various officer and management cadres within the corporate and production organisations.
The company considers Nigerian content an important feature of all its activities – projects, production and shipping. In line with this, all NLNG projects are required to have an approved Nigerian Content Plan as a condition precedent to Final Investment Decision (FID).
For NLNG, Nigerian Content is about maximising the use of Nigerian companies in the projects, thus developing indigenous service providers and suppliers (manufacturers and fabricators), to enable them attain excellence. By maximising Nigerian participation, projects result in significant local content, engendering technology transfer and development. It is also hoped that this will induce a spate of manufacturing and spur economic growth. Content surveys are conducted at scheduled intervals (in Nigerian cities) to identify indigenous companies capable of providing the goods and services NLNG requires.
NLNG partners in the development and upgrading of industrial manufacturers and service providers. The company encourages, and in fact invites, offshore manufacturers to develop relationships with onshore companies, to induce and maintain an excellent in-country manufacturing capability and service delivery.
It is intended that the improved capabilities of indigenous manufacturers and service providers be enough to service direct and contiguous needs within and outside the industry. While doing all these, NLNG strives to maintain international standards on Quality, Cost, Schedule and Health, Safety and Environment, HSE. This is done in the larger context of NLNG’s policy on Corporate Social Responsibility. The driving term here, therefore, remains sustainability. Some of the indigenous companies who have worked with and benefited from the NLNG Local Content Policy are:
NLNG began a relationship with Dorman Long during its Train 3 Expansion Project after its content survey had identified Dorman Long’s capability in fabrication. NLNG consequently facilitated an MOU between Dorman Long and Robey, another company identified with some capability for engineering services. Robey/Dorman Long subsequently delivered on an NLNG order for 1067 tonnes of steel structures and 160 tonnes of low-pressure carbon steel vessels for Train 3 Expansion Project. The relationship was short-lived, but NLNG further linked Dorman Long to Corus Steel Mill in the UK. Dorman Long recently received a contract worth $1.4m from NLNG/TSKJ for the fabrication of vessels in excess of 200 tonnes for the Train 6 project. NLNG, by this order, has supported the construction and installation of a large heat treatment furnace at the Dorman Long facility, a major technological leap that will aid the continued development and expansion of fabrication activities in Nigeria.
NLNG's relationship with Nexans Kabelmetal also dates back to Train 3. NLNG has helped Nexans Kabelmetal increase its capacity for the production of cables through an order for supply to Expansion Project (Train 3), which necessitated the acquisition of new equipment. Now Nexans Kabelmetal is veering into instrumentation cables, medium and high voltage cables. Nigerian Foundries NLNG worked with Nigerian Foundries to improve their processes for the manufacture of trench gratings, in order to use the gratings in NLNG projects. It is interesting to note that these gratings made from cast iron shapes arose from an adapted specification made by NLNG/TSKJ to meet an in-country capability. As in the case of Dorman Long and Nexans Kabelmetal, Nigeria LNG's order for gratings from Nigerian Foundries, aside from improving its processes, has also aided in the expansion of its facility and product base. Nigerian Foundries has now built another facility for manufacturing loading arms counterweights one of the materials needed at the loading facility on site for supply to NLNG.
Enchep Nigeria LNG is another company identified by the content survey with capability for gasket manufacturing, but unfortunately, Enchep used asbestos as feedstock. NLNG invited Flextallic of United Kingdom which had undergone the same process of having to change over from asbestos to spiral wound metal as feedstock. Flexitallic engineers helped Enchep clear its product line of asbestos and asbestos dust. This was financed by NLNG. Also financed by NLNG was the service of an internationally reputed foreign consultant, Admas Occupational and Environmental Health Consultants of Bradford, UK, who certified that Enchep's production line was free of asbestos dust. A partnership between Enchep and Flexitallic, encouraged by NLNG, ensued. This partnership has seen Flextallic introduce metal materials to Enchep as well as provide practical training to Enchep's engineers. This is in addition to helping Enchep set up quality assurance and control processes. Enchep is now ISO-9001 certified. The company has supplied over 35,000 pieces of different sizes and ranges of gaskets to NLNG for the Plus Project and has been given more orders for Train 6. And what’s more, Enchep has orders to supply its gaskets to another venture outside Nigeria!