Nigeria's huge gas reserve is a good omen for the country, which survives on only oil. The pioneer Managing Director, Nigerian Liquefied Natural Gas (NLNG) Limited, Dr. Godswill Ihetu, said the country has earned good cash from liquified natural gas export. He urged the Federal Government to make the best use of the opportunities offered by the product as it is fast replacing oil globally. Ihetu blamed funding by partners, among others, for the delay of Train 7 which, according to him, will provide over 40,000 new jobs when inaugurated, AKINOLA AJIBADE met him.

WHY did the Federal Government set up the Nigerian Liquefied Natural Gas (NLNG) Limited?

The government set up NLNG for a number of reasons, chief of which was to harness the potential of natural gas resources for growth. To achieve this goal, the government ensures that the firm produces and exports two products - the Liquefied Natural Gas and Natural Gas Liquids. Through this, the government has been able to leverage gas to earn huge revenues, after crude oil.

Other reasons advanced by the government, for setting up NLNG, include creation of jobs, improving domestic consumption of Liquefied Petroleum Gas (LPG), while, at the same time, improving the contribution of the gas sector to the Gross Domestic Product (GDP).

The NLNG, since inception in 1989, has been fulfilling its mandates of exporting liquefied natural gas to developed markets, as well as providing the government with huge revenues.

The country is blessed with proven gas reserves of about 200 billion cubit feet and unproven gas reserves of 600 trillion cubit feet. Based on this, the government does not need to worry on how to survive, once it focuses on how to develop the sector ore.

What delayed the implementation of Train 7 project, which the Federal Government, is leveraging to improve gas exports and further improve the country's earnings?

The delay in the implementation of Train 7 is caused by many factors such as funding, failure by major partners in NLNG to reach a consensus on how and when to invest in Train 7, and refusal by NLNG to take Final Investment Decisions (FIDs) as at when due, among others.

The partners are the sharehold-ings are Nigerian National Petroleum Corporation (NNPC) (49per cent), Shell (25.6 per cent), Eni (10.4 per cent), while Total Gas Elec-tricite (15 per cent). NNPC holds 49 per cent shares, on behalf of the Federal Government, while the three International Oil Companies (IOCs) namely Shell, Eni and Total own the remaining 51 per cent stakes in NLNG.

Despite this, the partners were unable to provide an estimated $17billion for the Train 7 project. The reason is because the money is huge and as a result, it would be difficult for them to provide. To achieve this goal, NLNG decided to approach the global market to fund Train 7. To raise this kind of money is not easy to come by, a development, which may have delayed the project. Added to this, is that many companies globally are yet to come out of recession, not to talk of providing a bailout for other firms.

Secondly, getting partners in NLNG to approve Train 7 is another problem facing the project.

Thirdly, is the issue of building new plants and getting bigger markets that are bigger enough to withstand the capacity of Train 7, is a problem.

All these things cannot be done in hurry. They need to be carefully carried out. The designs and configurations of the plants need to be done with caution. The reason is because gas business is a very sensitive one, which requires a lot of patience from the management of NLNG. So, NLNG needs to take necessary precautions, if its wants to build and sustain a virile gas market.

These elements are important to the successful implementation of Train 7 or any other projects, and once they are not there, it would be difficult for the owners of NLNG to take Final Investment Decisions (FIDs) on Train 7.

Often times, many Nigerians blame either the Federal Government or NLNG, for delaying the process of implementing Train 7. The reason is because many do not understand the intricacies involved in providing a vehicle for gas exports, and as a result, erroneously heaps blame on the government for lapses, that may occur in the process of exporting gas abroad.

How come the gaps between the first six trains and the seventh one that is being implemented by NLNG?

Permit me to answer your question this way. Life must be taken in its strides, if one would enjoy it. You must learn to handle things systemically. You allow the one you did to mature, before you add another one to it. The same rules are applicable to businesses. This might be the reason, why NLNG delayed for 12 years before it went ahead with the expansion of its LNG capacity by an additional eight million metric tonnes (MTPA). By this, I' m talking about 7train, which is eight million metric tonnes bigger than the Trains 1, 2, 3, 4, 5, 6.( Remember, the six trains have a combined capacity of 22 million metric tonnes of Liquefied Natural Gas.

When will Train 7 come to fruition?

Train 7 will be completed very soon. I have no doubt about that. The reason is because the management of NLNG has taken some positive steps, in this regards. The firm has taken care of some preliminary aspects of the project. For instance, NLNG has signed Letter of Intent (LoI) for Train 7, months ago. By October 31, this year, NLNG will sign the dotted lines in the documents, that are needed for the Final Investment Destinations (FIDs) to take place on the project.

What is the capacity of Train 7 project?

The project is expected to deliver 8mllion metric tonnes of Liquefied Natural Gas. Already, the six trains have a combined capacity of 22million metric tonness of Liquefied Natural Gas. The Train 7, when completed, will increase production to 30million metric tonnes, which in the long run, would have a multiplier effects on the economy. Apart from providing huge revenues for the government, Train 7 would open a vista of opportunities for operators in the oil and gas value chain. These include providing a forum for synergy, among operators in Nigeria and beyond.

How many jobs will Train 7 creates for the country?

The six trains have provided thousands of direct and indirect jobs in the country. Nigerians have acquired skills, following the completion of the six trains' years ago. Train 7 is expected to create more than 40,000, which is quite a laudable achievement for the country.

Will the expansion of Liquefied Natural Gas (LNG) Train to 7 bring in other investments into the country?

Of course, it would open door for more investors in Nigeria. The decision to build Train 7, by the Nigerian Liquefied Natural Gas, is expected to attract $10 billion in foreign direct investment in the next five years.

How has NLNG impacted on the nation's economy?

NLNG has impacted positively on the economy in many ways. The firm has assisted in boosting the earnings of the Federal Government, by generating revenues in excess of $100 billion for the government between 1989 and 2019, a development, which suggests that NLNG is 30 years old. In addition, NLNG has paid $36 billion dividends to its shareholders during the period.

Out of this, the Federal Government, through the Nigerian National Petroleum Corporation (NNPC) received the highest dividends, as its owns 49 per cent shares in NLNG, while other partners in the Joint Ventures (JVs) namely Shell, Eni and Agip shared the remaining dividends.

How much has NLNG generated from exports?

I can say precisely the amount of money, which generated from exports of Liquefied Natural Gas (LNG). All I know is that the bulk of the company's revenues comes from exports, especially through the various vehicles or trains that were built by NLNG. For instance NLNG has built trains 1, 2, 3, 4, 5, and 6, while construction of trains seven is underway.

Who are the buyers of Liquefied Natural Gas (LNG) abroad?

There is information on the new buyers of Liquefied Natural Gas (LNG). I think the firm has got one or two buyers. I do not know their names, as I got the information from public domain. That is from the media.

Being a former managing director of NLNG, you should have access to more information about the firm.

Cuts in That is what you think. But in reality, it is not. I access information from public domain, the same way you get your own.

How can be done to revive Olokola and Brass Liquefied and Natural Gas (LNG) Limited

I do not like to talk about the two projects. The reason is that they are sensitive and prone to crises. The Federal Government would like to state its position, which may be contrary to the position, which I and other observers in the Nigerian energy chain is holding. Those two projects enjoyed equity participation from NNPC. The government, I suspect does not want to make additional investment. These two projects are shaky, while NLNG is not. We just spoke about the issue of establishing NNLG by the government. How many years ago, in which NLNG was set up by the government? 30 years old. That is from 1989 to 1999 and NLNG is still strong.

But must government continue to waste tax payers' money, in view of the colossal amount of money invested in Brass and Olokola LNG.

Well, I do not know how much was invested in the two projects. Their owners are yet to invest in plants and pipelines, as far as I know. It is only the Brass LNG that has done its engineering works.

But I do not know the levels the two companies are. I do not know whether we can say the two projects are really wasted, because FIDs have not being done on the two.

It is at that point, you design, select the contractors, you sign agreement to supply gas to the two companies. Those two projects are not anywhere near that area. We cannot be really say the two projects are abandoned. But obviously, some money must have been spent on the two projects.

Is there any other way, in which, gas can help grow the nation's economy?

There are many ways, in which oil and gas companies can stimulate the growth of the economy.

Have you heard of Indorama in Rivers State? It was formerly Elemele Petrochemical Company, before NNPC or rather the Federal Government sold its 80 per cent equities to foreign investors. Now, the firm is called Indorama Petrochemical Company. It is a major oil company, which has diversified into production of fertilisers. Recently, investors brought in S1 billion equities to the firm, with a view help build its plant. Dangote Petrochechemical Refineries is there. The firm is expected to refine 650,000 barrels of crude oil per day, which is a good development for the country.

Nigeria is experiencing acute power failure, caused by shortage of gas and other infrastructures. What is NLNG doing in this?

To be honest with you, NLNG's has limited roles to play in this case. The reason is because NLNG was set up to export gas, and not to give gas to thermal plants, in order to generate electricity. There are oil firms, assigned to carry out that those functions.

For instance, Shell is one of them. International Oil Companies (IOC), including Shell is producing gas for the power sector, ditto indigenous oil companies.

On gas flaring, Nigeria can still use the product to power electricity plants. Some companies flare gas, capture the product and take it to pipelines and from their, send it to the power stations.

But are there other ways NLNG can meet the needs of the domestic market?

The firm produces Liquefied Natural Gas (LPG) to ensure that Nigerians use clean and healthy energy sources for growth. In the process of producing liquefied natural gas, NLNG derived what is called Liquefied Petroleum Gas (LPG).The company has helped in reducing in the scarcity of LPG in the market, through prompt supply of the product. Of course, that is another contribution of NLNG to the domestic market; NLNG had in December 2007, dedicated 150,000 metric tonnes to the domestic market yearly and later increased the volumes to 250,000 metric tones in 2013. NLNG is making efforts to ensure that infrastructure bottles, that arise in the course of transporting LPG from Bonny, Rivers State to Lagos is solved. The initiative was part of NLNG's commitment to the growth of LPG sub-sector.

© Pakistan Press International, source Asianet-Pakistan