Reuters
Monday January 14 2008
LAGOS, Jan 14 (Reuters) – Nigeria has inaugurated a sixth unit at its largest natural gas export plant, lifting annual shipments by a fifth to 22 million tonnes, an official said on Monday.
The $1.6 billion unit took three years to build and should raise annual sales of liquefied natural gas (LNG) from the whole complex, located on Bonny Island in the southern Niger Delta, to about $6 billion.
“It produced its first LNG on Dec. 23 and is now going through performance tests,” said Ifeanyi Mbanefo, a spokesman for the plant.
LNG is made by cooling and condensing gas to a liquid that is one six-hundredth of its normal volume. It is shipped in special tankers to markets in the developed world where it can be used for power generation or making chemicals.
Nigeria LNG is controlled by a group of Western companies that produce all the plant’s feedstock. They are Royal Dutch Shell, Total and Eni unit Agip. State-run Nigeria National Petroleum Corp. owns 49 percent.
The new unit was built by an international consortium known as TSKJ, comprising Technip, Eni unit Snaprogetti, Halliburton subsidiary Kellogg Brown and Root, and JGC Corp. under a contract awarded in 2004.
TSKJ has won a total of four major construction contracts for Nigeria LNG since its inception in the mid-1990s.
In 2005, Halliburton said “improper payments” to Nigerian officials may have been made to win one of the contracts.
Nigeria opened an investigation into allegations that the consortium paid $180 million in bribes for the deal, but its findings have never been made public.
Nigeria LNG is currently in talks with bidders for a seventh unit, which would take total annual capacity to 30 million tonnes, and a final investment decision is expected shortly.
In addition, there are two greenfield LNG projects in Nigeria which are both overdue for a final investment decision, and two more in the conceptual stage.
However, the eight-month-old government of President Umaru Yar’Adua has called on investors to divert more Nigerian gas to the domestic market to spur industrial development, and it is unclear if all these projects will go ahead. (Reporting by Tom Ashby, editing by Anthony Barker)
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