NLNG signs 20-year gas supply agreement for Train 7 (Nigeria)

Nigeria Liquefied Natural Gas (NLNG) has signed a 20-year supply agreement for its proposed 8 Mt/year (10.8 bcm/year) Train 7 project, which will increase the total production capacity of the company by 35% to 30 Mt/year (40.5 bcm/year). The deal is one of the key elements for a final investment decision (FID) on the project, which is planned by the end of 2019. In September 2019, NLNG signed a Letter of Intent (LoI) for the EPC of the Train 7 with a consortium composed of Saipem, Chiyoda, and Daewoo.

The NAOC Joint Venture (JV), which comprises Nigerian National Petroleum Company (NNPC), Nigerian Agip Oil Company (NAOC) and Oando, will be responsible for supplying 295 mcf/d (3 bcm/year) for Train 7. In addition, NLNG has renewed its supply agreement with the NAOC JV, which provide 345 mcf/d (3.6 bcm/year) for Trains 1-3 and 505 mcf/d (5.2 bcm/year) for Trains 4-6.

In October 2019, the NNPC has signed a US$2.5bn pre-payment deal with NLNG to develop upstream gas projects, in order to increase gas supply to the Bonny liquefaction plant. NLNG targets a full capacity utilisation of the six existing trains. Currently, NLNG has long-term gas supply agreements with Shell Petroleum Development Company of Nigeria Limited (SPDC), Total Exploration & Production Nigeria (TEPNG) and Nigerian Agip Oil Company Limited (NAOC). NNPC has a 55% share in SPDC, 60% in TEPNG and NAOC each.

NLNG, a company made up of NNPC (49%), Shell (25.6%), Total (15%) and Eni (10.4%), owns the Bonny Island liquefaction plant, which is currently composed of 6 trains with a total capacity of 22 Mt/year (29.7 bcm/year). In 2018, Nigeria was the fifth-largest LNG producer in the world, with its production reaching 25 bcm (-3% compared to 2017).