NNPC, others postpone decision on Brass LNG to Q4

There are strong indications that shareholders of the Brass LNG project, located in Brass, Bayelsa State, will likely sign the Final Investment Decision on the project by year end, having failed to sign the agreement as scheduled in the first and second quarters of the year.

The Brass LNG project, with an estimated production capacity of 10 million tonnes per annum, will be the second major liquefied natural gas project in the country, with the 22-million tonne Nigeria LNG project being the first.

The Nigerian National Petroleum Corporation holds 49 per cent interest in the project; Eni, 17 per cent; Conoco Phillips, 17 per cent; and Total, 17 per cent.

The NNPC plans to give 10 per cent out of its 49 per cent interest to the Bayelsa State Government.

A top source at the NNPC, who asked not to be named because the shareholders were not ready yet to speak on the issue, told our correspondent, “We are looking at signing the Brass FID by year end. We have little issues to sort out on gas supply for the project, we have received engineering, procurement and construction contract bids and we are evaluating the bids.

“After this, we will have an idea of the cost before the FID, which will take place towards the end of the year.”

Even before the latest postponement, the FID for the project had suffered several delays as it was originally scheduled to be signed in December 2006, but was moved to December 2008.

The source also confirmed that the Nigeria LNG Limited’s Train 7 project had been stepped down for the Brass LNG.

“We are taking Brass LNG first because it is wise to spread our LNG investments,” the source added.

The contract for the front end engineering and design of the Brass LNG project was awarded to Bechtel Corporation in late 2004. This followed the completion of the conceptual studies that assessed the viability of building an onshore Liquefied Natural Gas facility in the region of the Brass Oil Terminal operated by the Nigerian Agip Oil Company.

The board of Brass LNG Limited, had in March 2010, approved the publication of the invitation to tender for the project.

The Chairman of the board, Dr. Jackson Gaius-Obaseki, had said then that the decision represented a major milestone in the execution of the Brass LNG project.

However, a key shareholder in the Brass project, Total, had also indicated in 2010 that the project might not be ready until 2018.