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Replicate NLNG model to increase gas sector opportunities — Deputy MD

By News Express on 22/02/2018

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Deputy Managing Director of Nigeria LNG Limited (NLNG), Sadeeq Mai-Bornu, on Tuesday 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) holding in Abuja.

Other participants at the executive roundtable discussion 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.

Mai-Bornu said: “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. The LPG market is a deregulated space. NLNG supplies about 50% 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. There are vehicles that run on LPG. I think if we have the incentives and guarantees, and also the sanctity of contract, NLNG success story can be replicated in other sectors. Part of that success would also be the pricing and the tariff talked about.

“Moving forward, NLNG is investing in expansion with a Train 7 project. It involves a huge amount of money but because the markets are there, we are in the position to invest up to $5 to $10 billion 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.

•Photo shows Deputy Managing Director of Nigeria LNG, Sadeeq Mai-Bornu (4th Left); Minister of State for Petroleum Resources, Dr. Ibe Kachikwu; President, Nigerian Gas Association, Mr Dada Thomas, and other speakers at the Nigeria International Petroleum Summit (NIPS) in Abuja…recently.

 

Source News Express

Posted 22/02/2018 12:07:44 AM

 

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