The Nigeria Liquefied Natural Gas, NLNG, has signed the engineering, procurement and construction (EPC) contract for the long-awaited Train 7 project in line with its major gas expansion plan.
The project is expected to boost Nigeria’s liquefied natural gas (LNG) output by more than 30%.
This was disclosed by the Minister of State for Petroleum Resources, Timipre Sylva during an online event in Abuja Wednesday.
The company had previously announced that it would award the EPC to a consortium of 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.
The NLNG, signed its final investment decision on the Train 7 processing unit late last year, with the recent development, “The construction phase of Train 7 can now commence in earnest,” the minister said.
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, according to data intelligence firm Kpler.
Still, Sylva and Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mele Kyari said the Train 7 is a five-year project, giving demand time to rebound, and said it was key to Nigeria’s own economic recovery from the pandemic.
“Unless projects like this go on, the economy will not improve,” Sylva said.
The NLNG is a consortium between state-run NNPC, Eni, Total and Royal Dutch Shell.