Nigeria LNG, the operator of Africa’s largest natural gas plant, is in talks with lenders to finance a $10bn expansion, the World Oil website reports.
The company is hoping to raise $2bn from domestic lenders such as the Guaranty Trust Bank and Zenith Bank, and is looking to foreign lenders, backed by export-credit guarantees, for the rest.
If the fund-raising drive is successful, the company intends to build the gas plant’s seventh train, expected to boost output by 40%.
This train train is expected to cost $7bn to build, with another $3bn going on pipelines and other supporting infrastructure. When complete, in five years’ time, output is expected to reach 30 million tonnes a year, an increase of 8 million tonnes.
Nigeria LNG has already selected a consortium of builders, led by Italian energy specialist Saipem and including Chiyoda of Japan and Daewoo Engineering & Construction of Korea. Tony Attah, the chief executive of Nigeria LNG, said in a recent interview that the future of Nigeria’s energy sector belongs to gas. He said: “We have been riding on the back of oil for more than 50 years. Now it is time to fly on the wings of gas. Most people don’t realise that Nigeria is more a gas nation than an oil one.”
Demand for gas is being fuelled by growing demand from China, as well as emerging markets, such as Pakistan, Bangladesh, Jordan and Jamaica, according to Attah.
Nigeria LNG is 49% owned by Nigerian National Petroleum. Royal Dutch Shell owns 25.6%, Total 15% and Eni 10.4%. The company expects to take its final investment decision on 31 October. GCR