Related - BIG $$ investment contunues in Nigeria
REUTERS Partners sign MOU on $6 bln Nigerian LNG project [GFWQXXZ]
ABUJA, July 25 (Reuters) - State company Nigerian National
Petroleum Corp (NNPC) and three foreign oil and gas majors have
signed a memorandum of understanding (MOU) to formalise the $6
billion Olokola liquefied natural gas (LNG) project.
The four-train Olokola, which will have a total capacity of
22 million tonnes per year, is expected to start its first two
trains in 2011. Together with other projects, it would make
Nigeria one of the world's biggest producers of LNG.
Nigeria is looking to LNG, gas which has been cooled into
liquid form for easy transport by tanker, as a way to make
better commercial use of its huge gas reserves.
A large proportion of Nigerian natural gas is currently
flared because of a lack of infrastructure to exploit it
commercially, causing major environmental damage to the
oil-producing Niger Delta.
NNPC has a 49.5 percent stake in the Olokola project while
Chevron <CVX.N> and Royal Dutch Shell <RDSa.L> each have 18.5
percent and BG <BG.L> has 13.5 percent.
Olokola, which is being fast-tracked by the government of
President Olusegun Obasanjo, will be built in a free trade zone
straddling the southwestern states of Ondo and Ogun.
The MOU, signed by NNPC and its partners on Monday,
formalises the relationship between the project and the free
trade zone, a Chevron spokesman said on Tuesday.
He said the MOU did not represent a final investment
decision (FID) by the partners.
NNPC said in January it expected the FID on Olokola to be
signed in the third quarter this year, while the FID on another
LNG project, Brass, would be signed in the fourth quarter.
Chevron was originally a partner in the $5 billion Brass
project until it pulled out in March to focus on Olokola
instead. It has been replaced by Total <TOTF.PA>. Other partners
in Brass are ConocoPhillips <COP.N>, ENI <ENI.MI> and NNPC.
The Brass plant will be built off the coast of Bayelsa state
in the Niger Delta near the Brass oil export terminal. It is
expected to produce an initial 10 million tonnes of LNG and 2.5
million tonnes of liquefied petroleum gas per year.
Nigeria's first LNG plant located on Bonny Island in
southeastern Rivers state, also in the Niger Delta, is expected
to raise production to 22 million tonnes per annum when its
sixth train starts up in 2007.
(c) Reuters 2006.
Source RTRS Reuters News
