The chief executives of the Nigerian National Petroleum Corporation (NNPC), Total and ENI are scheduled to meet early next month to decide the fate of the $15 billion Brass Liquefied Natural Gas (LNG) project located on Brass Island, Bayelsa State, THISDAY has learnt.
This is coming as uncertainty continues to loom over the fate of the $547 million already plunked into the Olokola LNG project situated on the border town between Ogun and Ondo States, following the withdrawal of the project’s shareholders and the recent decision by the NNPC to relocate its staff seconded to the project to Abuja.
THISDAY gathered that the shareholders of Brass LNG who have invested about $1 billion on early works, without signing a Final Investment Decision (FID), will meet in London between January 10 and 12, 2017 to take a decision on the multi-billion dollar project, whose FID has been kept in abeyance for a decade.
An official of one of the shareholders, who spoke to THISDAY on the condition of anonymity, maintained that the Brass LNG project remained on course and blamed the delay in signing the FID to the absence of political will on the part of the Goodluck Jonathan administration and what he called the protracted withdrawal of ConocoPhillips from the project.
According to him, the shareholders – NNPC, ENI, Total and ConocoPhillips – were at the point of signing the FID before the American oil major pulled out of Nigeria.
“It took them a very long time from the period they made the announcement to the period they finally pulled out, because they were looking for investors who will buy their oilfields in Nigeria and their 17 per cent stake in Brass LNG. When they found Oando, the company could only buy their oilfields
immediately. So, their withdrawal was very protracted and this affected the Brass project,” he explained
“Again, we were to use ConocoPhillip’s cascade technology to build the plant. When they pulled out, they dragged their feet before they agreed to give us the licence to use the technology. Even when they agreed, they said that they would not be held responsible if anything happens to the plant in the course of using their technology,” he added.
The official, however, said the Brass LNG project remained on course, adding that LNG projects were viable. “You will recall that Nigeria LNG bailed out the federal government.
“The Brass project is viable but the past administration lacked the political will to pursue the FID. We are hopeful that Brass will go forward.
“The Minister of State for Petroleum, Dr. Ibe Kachikwu secured $80 billion funding from the Chinese and Indians and we are hopeful that Brass will benefit from this funding.
“We have done a lot of optimisation in Brass. We have reconstituted our team and changed ConocoPhillip’s model and we are now using the Nigeria LNG model.
“Our technology now is APCI technology used in building Nigeria LNG. The Managing Director is now from ENI. We have scaled down the cost from the initial $15 billion; it is now affordable to the shareholders.
“We wanted to start with two trains but we have reduced it to one. The shareholders have also warehoused ConocoPhillip’s shares. And there is a political will on the part of the present administration. So, after the meeting next month, the shareholders will make a statement,” he added.
THISDAY, however, gathered that 58 of the 70 personnel of NNPC, who were seconded to Brass LNG, were recently recalled to Abuja, leaving only 12.
Similarly, NNPC has relocated its staff seconded to Olokola LNG to Abuja, following the withdrawal of all the shareholders from the project.
THISDAY learnt that since the withdrawal of Chevron (14.25 per cent); Shell (19.5 per cent) and BG (14.25 per cent) due to what the shareholders called “varying constraints”, NNPC, which holds 46.75 per cent of the project, has continued to sustain Olokola LNG by funding minimal activities.
A source at NNPC, who confirmed the relocation of its OKLNG staff to Abuja, told THISDAY that the project expenses since inception amounted to about $547 million.
“This includes $4.5 million proposed for the 2016 work programme and budget, which is 100 per cent funded by the NNPC,” he said.
“OKLNG proposed a budget of $12.5 million for 2016 but with the relocation of OKLNG staff to Abuja, the budget was revised downwards to $4.5 million to reflect minimal activities while operating from Abuja,” he added.
According to him, with the withdrawal of the shareholders and the relocation of staff, there is uncertainty over the fate of the $547 million spent on site preparation and early works.
Brass LNG and OKLNG were conceived by the administration of former President Olusegun Obasanjo in 2005 to boost gas supply to both domestic and export markets.
Source:© Copyright Thisday Online