Nigeria Liquefied Natural Gas (NLNG) Limited, marked its 35 years of existence and 25 years of operations a few days ago.
The company deserves a big applause for its contributions to the social, economic and educational development of this great nation, Nigeria.
Its location on Bonny Island has not only brought economic prosperity to its host communities but also to the country at large. Many youths who would have been roaming about the streets and engaging in one crime or the other are today gainfully employed by the company, and many lost hopes have been restored through its educational assisted program, its local content program, and Agro- enterprise.
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.
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 was estimated at one percent.
Its positive impacts on the Nigerian social, and economic lives are unquantifiable, especially in the last 25 years.
The entity once regarded as the most reliable LNG plant in the world has not only delivered the right molecules across the globe, but it has also recorded remarkable achievements in the oil and gas sector in its 25 years of operations.
From all intent and purposes, the Nigeria LNG is performing better than what its shareholders expected despite all the challenges it is facing today.
While the upstream companies have over the years witnessed a decline, the NLNG has witnessed tremendous growth in its spheres of operation.
The plant has rapidly and successfully made the transition from a construction project to a stable production operation, with a robust framework of people, processes, systems and organisation, as well as a relentless focus on operational excellence and continuous improvement.
Right from the time when the Final Investment Decision (FID) was taken in November 1995 by the shareholders, to build a Liquefied Natural Gas (LNG) plant in Finima, Bonny Island in Rivers State, there have been a flurry of activities daily which have impacted the lives of Nigeria positively.
The Engineering, Procurement and Construction (EPC) contract was awarded in December 1995 to a consortium of engineering firms, TSKJ, comprised of Technip, Snamprogetti, M.W. Kellog and Japan Gas Corporation for the Plant (consisting of two trains—Trains 1 and 2, called the Base Project), the Gas Transmission System (GTS) and the Residential Area (RA).
Construction at the Plant site commenced in February 1996 and on August 12, 1999, Train 2 was ready for startup. Production of LNG commenced on September 15. Train 1 subsequently came on stream on February 27, 2000
The second phase of development, called Expansion Project, commenced with an FID in February 1999 to develop Train 3 and the Plant’s Natural Gas Liquids (NGLs) Handling Unit (LHU)—condensate stabilisation and Liquefied Petroleum Gas (LPG) production units. The expansion project was completed and came into operation in November 2002.
This was quickly followed by the next phase of development called the NLNGPlus Project, comprised of Trains 4 and 5, which commenced with an FID in March 2002. Train 4 came on stream in November 2005 and Train 5 was started up in February 2006. NLNGSix Project, consisting of Train 6 and additional condensate processing, LPG storage and jetty facilities, commenced with an FID in 2004. Train 6 became operational in December 2007.
The level of seriousness attached to the project by the shareholders, especially in Nigeria was Phenomenally unprecedented.
With six trains currently operational, the entire complex is capable of producing 22 million tonnes per annum (mtpa) of LNG, and 5mtpa of NGLs from 3.5 Billion (standard) cubic feet per day (Bcf/d) of natural gas intake
Currently, Train 7 is under construction, and upon completion, it will increase the NLNG Terminal production capacity by 35% from the current 22mtpa to 30mtpa. The estimated costs are approximately US$6.5bn and it is expected that about 52,000 jobs will be created.
Economy
The projects have contributed immensely to the economy of Nigeria in various degrees. For instance, it has given the Nigerian government through the Nigeria National Petroleum Company (NNPC) Limited dividends. The dividends paid to the state-owned NNPC jumped by 52 percent to $1.10 billion in 2022 from $722.44 million in 2021.
The company has created several thousands of direct and indirect jobs for Nigerians.
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 was estimated at about one percent. NLNG provided more than 12,000 jobs at the peak of construction of each plant.
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 wellbeing 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 per cent belonging to the country through the Nigerian National Petroleum Company Limited (NNPC).
Nigerian Content
In a collaborative initiative, and to strengthen its relationship with the Nigerian Content Development And Monitoring Board (NCDMB), in May 2017, NLNG signed a business-to-business Service Level Agreement (SLA) with NCDMB. The SLA became necessary because of the peculiar nature of NLNG’s operations which is time-sensitive.
The SLA was a key strategy for shortening the contracting cycle, cutting the cost of projects and improving compliance with the Nigerian Content Act 2010. It is worthy of note that this was then the first of its kind in the Oil and Gas industry in Nigeria and it supports the Federal Government’s drive to enhance the ease of doing business in Nigeria.
A key initiative in shipping was achieved with the contract awards by Bonny Gas Transport (BGT), a subsidiary of NLNG, to construct six new Dual Fuel Diesel Electric (DFDE) LNG carriers – four by Samsung Heavy Industries (SHI) and two by Hyundai Heavy Industries (HHI). The six vessels, built in South Korea under the BGT Plus Project and delivered, enhanced the level of Nigerian ownership and shipping capacity in the fleet through the government’s holding in NLNG.
For the contract, NLNG made additional investments to the contractors’ commitment for:
- Utilisation of suitable Nigerian goods and services in the construction of the vessels.
- Training of over 700 Nigerians in shipbuilding in both Nigeria and the contractors’ shipyards in South Korea.
- Utilization of qualified Nigerians in the contractors’ shipyards as part of the workforce for the construction of the vessels.
- Promotion of the establishment of a ship-repair yard in Nigeria for in-country capacity development for repair and maintenance of Very Large Crude Carriers (VLCC), LNG carriers, large and medium-sized carriers, drilling Rigs and support vessels by commissioning a feasibility study at various sites (Onne, Bonny, Olokola, Badagry, Ogogoro Island, Ladol, etc.) to that effect.
- Setting up of the Maritime Centre of Excellence (MCOE) on Bonny Island to provide marine and technical shipping services.
Training and Skills Acquisition
Thirty-five Nigerian trainees participated in the construction of the six (6) DFDE ships in South Korea as part of the implementation of the Nigerian Content deliverables on the BGT Plus Project. This number included the twenty-eight (28) trainees who completed their initial training in South Korea and the seven
(7) that successfully concluded training on Ship Design at International Energy Services Limited (IESL) in Lagos.
Over four hundred and twenty (420) Nigerians completed the basic welding training in the Bonny Vocational Centre training facilities of Hyundai Heavy Industries and Samsung Heavy Industries as part of the Nigerian Content deliverables of the BGT Plus project. The training facilities of HHI and SHI were handed over to Bonny Vocational Centre (BVC), also as part of the Nigerian Content deliverables of the project. This enhanced the capacity of BVC to train more Nigerians on basic and advanced welding using state-of-the-art equipment.
Six (6) Nigerians participated in the ship construction at HHI’s Ulsan shipyard as ship managers (two Production Managers, two QA/QC Managers and two HSE Managers). About One hundred and twenty (120) Nigerian trainees completed the ship construction training by Samsung Heavy Industries in South Korea.
Education
Nigeria LNG Limited remains focused on education and human capital development as areas of special significance because these two areas are intrinsic and fundamental to national development. NLNG has three main levels of scholarship schemes: Post Primary, Undergraduate and Post Graduate to encourage academic excellence and support human capital development in Nigeria.
The University Support Programme, launched in 2014, is part of NLNG’s commitment to develop education and complement government and stakeholders’ efforts. NLNG spent about USD12 million (amounting to USD2 million per university) to build modern engineering laboratories and/or furnish them with cutting-edge engineering equipment to aid teaching and research in six universities across Nigeria’s six geopolitical zones.
The Bonny Vocational Centre, established in line with specific agreements with Bonny Kingdom, a vocational enterprise institution approved and accredited by relevant agencies and awarding bodies such as the Rivers State Ministry of Education, National Board for Technical Education (NBTE), National Business and Technical Examination Board (NABTEB), Federal Ministry of Labour and Employment, City and Guilds of London Institute, and the Institute of Leadership and Management, London.
Economic Empowerment
The NLNG Youth Empowerment Scheme (YES) was launched in 2004 as a sustainable development initiative aimed at youths (18-35 years old) within NLNG’s host communities. YES is designed to make the participating youths economically and socially responsible and self-reliant through guided technical and managerial development training.
Since inception, over 1000 youths from various host communities have participated in the scheme and have been trained in vocational modules like catering and hotel management, hairdressing and cosmetology, fashion and design, photography and video production, woodwork and furniture making, and welding and fabrication.
Focus of the Scheme is now on ensuring financial independence or self-sustenance of the youths after training. In 2019, our sustainable implementation of this programme and its consistent approach at reducing poverty led to our winning ‘The Best Company in Poverty Alleviation’ category of SERAS 2019 Africa Corporate Social Responsibility award.
The 2019 set of 89 persons completed their training with a graduation ceremony that was held on Tuesday, November 5, 2019.
Agro-Enterprise
The Nigeria LNG Agro-Enterprise Development Action was designed to enhance the revenue-earning potential of rural entrepreneurs through the provision of value-added agricultural and non-agricultural services like capacity building in farm management techniques, exposure to improved varieties and crops,
Farmers are given support packs in the form of enhanced seedlings or stems, herbicides, and fertilizer products are periodically distributed to participating farmers.
Since its inception, emphasis has shifted to commercial farming plus linking farmers to viable markets for their products. Development agencies like International Fund for Agricultural Development (IFAD), Market Development in Niger Delta (MADE), Amo Farms, Rivers State Sustainable Development Agency (RSSDA) and Partnership in Niger Delta Development (PIND), among others, as well as facilitators like International Institute for Tropical Agriculture (IITA) and Nigeria Agricultural Insurance Corporation (NAIC) work as partners and coordinators to help the farmers effectively transition to commercial farming.
Support to Fisherfolk Community
As part of our CSR, company annually provides support materials and palliatives to fishermen from the various fishing communities across Bonny kingdom to encourage them to fish in a sustainable manner.
These support items are usually presented at an annual Interactive forum/session. They are provided to encourage the fisherfolk carry out their fishing activities away from or exclusion zone/vessel access path. The sessions are also used to educate the fisherfolks on safe and acceptable fishing habits, as prescribed in the ESHMP.
It is instructive to note that the support provided and the engagements held with the Bonny fisherfolks have over the years created a healthy and mutually beneficial relationship which has ensured adherence to the instructions regarding the exclusion zone thereby granting unfettered access for vessel operations.
The implications to company operations are that the vessels are able to achieve a faster berthing turnaround time and by extension a more efficient cargo loading lead time.
The NLNG therefore if given the necessary support by all stakeholders and allowed smooth operations there is no doubt that it would further do more things that would be of tremendous benefits to Nigeria, Nigerians, and the global community at large.