How Govt Can Unlock Full Potential Of LNG Train 7 Project— MD LNG Worldwide

The Managing Director of LNG Worldwide Ltd, Pat Roberts, has said that the Federal Government must unlock some of the bottlenecks in the Nigerian Liquefied Natural Gas Ltd. (NLNG) to achieve full capacity for Train 6 and for the Train 7 project to work.

Roberts said it will be difficult for Nigeria and African countries like Mozambique to come anywhere close to the US because they are a new green field.

The MD said this during a master class at the 2024 Americas Energy Summit in New Orleans, USA attended by THE WHISTLER.

Roberts spoke on ‘Global LNG and Gas Business Dynamics.’

She named Qatar, Australia and the US as the three major exporters that exported about 66 per cent of the world’s LNG, adding they will continue till around 2030.

Nigeria sees an opportunity in its vast natural gas resources- Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for export and hopes to achieve it through its 34-year-old NLNG Ltd.

However, the bottlenecks of upstream gas supply issues and pipeline vandalism left the 22 Metric Tonnes Per Annum (MTPA) Train 6 facility on Bonny Island producing far below capacity.

During the 2022 flood in Nigeria, NLNG declared force majeure as the flood disrupted gas supply. The NLNG also reportedly stopped gas shipment due to vandalism and declared additional force majure around December 2022 and January 2023.

Responding to THE WHISTLER on the future of the NLNG Train 6 and Train 7, she acknowledged the huge potential in the NLNG gas projects but she said the government needs to unlock the feed gas problems.

According to her, Nigeria has abundant reserves that can be channelled into the Train 6 plant but the government pricing of feed gas may be discouraging the producers.

Roberts said, “New feed gas pays. That is the message. You have a fabulous plant in terms of where it is and what it can do at the basics with the supply. It needs to unlock the feed gas problem. It has Train 7 under construction. It has debottlenecking for the earlier trains as well, everything is there in terms of the hardware to make this work but it is feed gas. That is the bottleneck and there has been a serial underinvestment in feed gas or perhaps the government pricing of feed gas doesn’t incentivise the producers to produce it.

“The solution is to change feed gas economics like incentivise feed gas production and make sure that feed gas can earn a decent rate of return of the feed gas production.”

During the sideline of the event, the MD exclusively Spoke to THE WHISTLER on how the US LNG model differs from the Nigerian model.

NLNG flagged off the construction of Train 7 project at a groundbreaking ceremony on 15th June 2021.

The Train 7 is expected to increase NLNG’s six-train plant capacity by about 35 per cent from an extant 22 MTPA to 30 MTPA.

Roberts said the US model which is the stranded gas project is different from the Nigerian model and it is cost effective.

She said Nigeria needs to remodel its cost component so that its market will be highly competitive when compared with competitors.

She said, “It is the consistency of feed gas that is what it is about. Nigerian LNG has a super plant, it is in the right place if capitalised on, and it has good markets and good partners. It is the feed gas issue that is the bottleneck. So, resolve that you have resolved the future of the NLNG.

“The US model is very different. This is a stranded gas project. In Nigeria it is not that there is abundant gas that you are trading in the domestic market. For Nigeria, there needs to be availability of feed gas to keep these plants fully loaded.

“What Nigeria needs to do is its competition versus other LNG projects and that is where it needs to be able to ensure it sort of utilises its plants at the industry level. Nigeria has to look at the cost tag. Nigeria has very good sort of investors in the plant anyway who have been ready to back it up with the Train 7 expansion and also the debottlenecking.”

She said the Train 6 is a very good project that has produced very good results adding “There is no way you can’t extend the life of this project significantly. But it does take a whole new round of investments in feed gas.”