News Agency of Nigeria (NAN)

Replicate NLNG model to increase gas sector opportunities — Mai-Bornu





Aerial view of Nigeria Liquefied Natural Gas (NLNG) plant at Bonny Island in Rivers State

By Edith Ike-Eboh/Yetunde Bada

The Deputy Managing Director of Nigeria Liquefied Natural Gas Limited (NLNG), Sadeeq Mai-Bornu said the NLNG business model needs to be replicated in order to generate opportunities for the power and gas sectors in the country.

Mai-Bornu spoke at an executive roundtable discussion titled “Africa as an Emerging Gas Producer: Prospects and Opportunities” at the first Nigeria International Petroleum Summit (NIPS) in Abuja.

The News Agency of Nigeria (NAN) reports that other members of the panel include  the Managing Director of Shell Nigeria Exploration and Production Co. Limited (SNEPCO), Bayo Ojulari; President, Nigeria Gas Association and Managing Director of Frontier Oil Limited, Dada Thomas; Group Executive Director and Chief Operating Officer (COO), Power and Gas at Nigerian National Petroleum Corporation (NNPC), as well as other executives in the industry.

“Nigeria is a gas country with some oil.

“ NLNG is a success story partly because we are in the mid-stream and most of the risks have been taken by the upstream companies.

“ But the thing is that there is a market out there. We sign a 20-year contract for the supply of molecules and we can actually go to the bank and get the funding we need.

“When NLNG was set up, it had guarantees and incentives that safeguarded investments and returns. There was also the sanctity of contracts.

“ That is what has helped NLNG. This model needs to be developed in the upstream and downstream.

“Let’s bring this closer home,’’ he said

He added that the LPG market is a deregulated space adding that NLNG supplied about 50 per cent of the LPG in the country.

“ We see opportunities to do more. People think LPG is just for cooking. The more important use of LPG is as an industrial fuel. LPG has already been used for power in the developed world and even in Nigeria,’’ he added

Mai-Bornu noted  that there were  vehicles that run on LPGadding that  NLNG success story could  be replicated in other sectors.

According to him, Part of that success will also be the pricing and the tariff talked about.

He further said that the NLNG currently invested in expansion with a Train 7 project.

This, he said would involve a huge amount of money but because the markets are there, we are in the position to invest up to 5 to 10 billion dollars  both in the upstream for the gas supply and in the infrastructure to construct the Train.

“ There is opportunity in that area.

“Globally, markets are being created innovatively. For instance, I am aware that there is a state in Nigeria that is interested in Floating Storage Regasification Unit.

The thing about that is the pricing because production of power through that is a bit more expensive but if you deregulate that sector where there is a willing seller and willing buyer space, that would be something that could make an impact in the future.

We also see opportunities in trucking LNG, bringing industries to life because you can now have some captive power there.

“We also see LNG being used as a marine fuel and that is because there is an increasing clamour for cleaner energy sources. If the NLNG model is picked up, with the full participation of the private sector and the government guaranteeing some risks, this can move the needle a bit,” he said.

NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas B.V.  (25.6%), Total Gaz Electricite Holdings France (15%), and Eni International N.A. N. V. S.àr. l (10.4%).