NLNG to invest $10bn in upstream gas supply, infrastructure
NLNG Limited (NLNG) is in the position to invest up to $5 to $10 billion in the upstream gas supply and infrastructure for the construction of the Train 7 gas project, the Deputy Managing Director of NLNG, Sadeeq Mai-Bornu, has said.
Mai-Bornu added that the replication of the company’s business model would generate opportunities for the power and gas sectors in the country.
He 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.
He 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 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.
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.
“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,” he said.