Nigeria LNG Limited (NLNG) is considered one of the most important economic projects in Nigeria. Since it began operations in 1999 when it shipped its first LNG cargo, NLNG has brought significant economic benefits to Nigeria.
Today, NLNG has a total production capacity of 22 Million Tons Per Annum (mtpa) of LNG and 5mtpa of Natural Gas Liquids (NGLs) from its six-train plant complex.
The company has 16 long-term Sale and Purchase Agreements (SPAs) with 10 buyers and controls about 6 percent of global LNG trade.
NLNG began its intervention in the supply of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, to the domestic market in 2007 under the NLNG DLPG Scheme. The supply has stimulated growth in the industry, guaranteeing LPG supply, availability and affordability. This has also inspired the development of different parts of the DLPG value chain.
In 2019, NLNG shareholders took the Final Investment Decision (FID) on its 7th train and awarded the Engineering, Procurement, and Construction (EPC) contracts for the plant expansion in 2020. The long-awaited expansion will increase production capacity by 35 per cent from 22mtpa to 30mtpa and enhance NLNG’s competitiveness in the global market.
The company has a proven track record of resilient performance (Operational Excellence, HSE, etc.) and unswerving profitability.
NLNG has also over the years paid dividends of about USD18 billion to the Federal Government of Nigeria courtesy of its shareholding in the company, via Nigerian National Petroleum Company Limited, NNPC.
As a good corporate citizen, NLNG also contributes to national wealth and the economic well-being of states in which it operates, by paying all applicable taxes and tariffs. The company has paid about USD9 billion in taxes to the Federal Government of Nigeria.
Payment to the Federal Government of Nigeria via its shareholding in Nigerian National Petroleum Company Limited, NNPC, for feedgas from inception till date is about USD15 billion.
With its plant construction, the company generated considerable Foreign Direct Investment (FDI) for the country. NLNG has assets (i.e. property, plant and equipment) worth about USD17.5 billion with 51% stake by international oil companies and 49 percent belonging to the country through the Nigerian National Petroleum Company Limited (NNPC).
Gross Domestic Product (GDP)
The company, since 2008, has contributed about four percent of Nigeria’s annual Gross Domestic Product (GDP). With rebasing of the GDP in 2014, NLNG’s contribution to the GDP is estimated at about one percent.
Job Creation
NLNG provided more than 12,000 jobs at the peak of construction of each plant. Overall, the major sub-contractors employed over 18,000 Nigerians in technical jobs in the Base Project (Trains 1 and 2).
Through each Nigerian Content plan for its contracts, NLNG has promoted the development and employment of Nigerian manpower. Over 12,000 direct jobs will be generated during the construction phase of Train 7.
Local Content Development
NLNG supports the development of community and Nigerian contractors to enhance their capacities and capabilities thereby enabling them to achieve standards of excellence. In our host community, through the initiative to empower local contractors via the Finima Legacy Project, indigenous contractors have made capital investments in their companies thereby expanding their operating capacity. The capabilities of local vendors have also been developed through mentoring and partnerships between more established Nigerian vendors and community vendors.
Nigerian Content commitment in the acquisition of six new technology DFDE ships by NLNG’s subsidiary, Bonny Gas Transport, led to major achievements such as a feasibility study for the establishment of a drydocking and ship-repair yard in Nigeria, the training and development of Nigerians (both in Nigeria and Korea) in various aspects of ship design and construction, and export of Nigerian goods for use in construction of BGT ships in South Korea.
For Train 7, 55% of both engineering activities and procurement will be carried out in Nigeria and by Nigerian vendors.
Environmental Hazard Reduction
Nigeria LNG Limited utilizes gas that would otherwise be flared by upstream companies, which has helped to protect the environment from the effects of gas flaring. NLNG has contributed to the reduction of gas flaring in Nigeria from 65 to about 20%.
The environment is further protected by the significant reduction in felling of trees for use as fuels. Further, NLNG has contributed to a healthier nation by encouraging the use of cleaner energy through its domestic LPG supply programme which has also resulted in reduced expenditure on respiratory health issues.
Deepening Domestic LPG Sector
For over 10 years, NLNG’s intervention in the supply of Liquefied Petroleum Gas (LPG) – otherwise known as cooking gas – to the domestic market under the NLNG DLPG Scheme has guaranteed LPG supply, availability and affordability, and has stimulated the development of different parts of the DLPG value chain in Nigeria.
Nigerianisation
NLNG and its shareholders agreed on a Nigerianisation scheme on September 1, 1997. This was revisited and updated in 2004. The objective of the scheme which was to Nigerianise the company’s workforce was achieved in 2012. The company is now run by a 100% Nigerian senior management team and 95% Nigerian staff. NLNG, therefore, contributes to the reduction of unemployment figures in Nigeria.
Increased Shipping/Marine Human Resources
With the incorporation of its first subsidiary, Bonny Gas Transport (BGT), in 1989, the LNG shipping industry in Nigeria was born. Currently, NLNG, through NLNG Ship Management Limited (NSML), another of its subsidiaries, is the biggest employer of Nigerian seafarers on board its 13 BGT-owned ships. NLNG has trained hundreds of sea-going officers, some to the level of captains and chief engineers.
Vendor Finance Scheme
NLNG recognises the fact that funding is the bane of the Nigerian manufacturing industry. This led, in 2013, to the introduction of the USD1 billion NLNG Local Vendors Finance Scheme (NLVFS) which was increased to USD1.2 billion in June 2017 with the introduction of an additional participating bank to the scheme making a total of six participating banks.
The scheme facilitates access to funds from six participating banks to NLNG-registered vendors (suppliers of goods or contractors of services). Under the scheme, vendors are able to get quicker access to finance at fairer terms for their NLNG-related business operations by leveraging on NLNG’s relationships with the banks.
