Former Head of Interim National Government, Chief Ernest Shonekan, has stated that from the stand point of economics, the proposed Train 7 of the Nigerian Liquefied Natural Gas (NLNG) in Rivers State would attract Foreign Direct Investment (FDI) estimated at over $8billion.
Speaking recently on the occasion of his visit to the plant in Finima, Bonny Island, Shonekan said Train 7 would also contribute significantly to reduction of flared gas, while further monetising Nigeria's gas resources and improving the country's revenue profile.
On employment generation, he stated that Train 7 would provide about 10,000 jobs for Nigerians, and particularly the youths in the Niger Delta.
"Since it opened shop in Bonny, Nigeria LNG Limited has provided more than 2,000 jobs each construction year and 18,000 jobs at the peak of construction. The sequential nature of the project ensures that labour force is retained over the years," he said.
Shonekan said Nigeria no longer had the luxury of deferring major decisions or picking and choosing developmental projects to do and in what order, adding that the LNG market was tightening, with other nations not staying idle.
"The United States, formerly a major LNG export destination, will become a net LNG exporter by 2016, starting at 1.1 billion cubic feet per day and rising to 2.2 bcf/d in 2019. Australia has 10 fully sanctioned LNG projects with a total of 20 trains, 81 million tonnes per annum (mtpa) of capacity and $215 billion worth of final investment decision. China and United States will soon become major exporters of shale gas. Chinese reserves are estimated at 1,275 trillion cubic metres. Mozambique will next year take a final investment decision to build a two-train facility for its recent gas finds offshore Mozambique," he said.
He stated that the Nigeria LNG Limited was once the fastest growing facility in the world but had lost its place in front of the queue to Qatar and Australia.
According to him, these countries have moved their output from 20 million metric tonnes range to 80 and 81 million metric tonnes respectively, while NLNG is stuck at 22 million metric tonnes.
"NLNG used to have 10 per cent of the market share. That has slipped to about seven per cent with serious threat for further erosion to its market share by the big players coming into the market. In effect, if the market becomes saturated without gas from Nigeria, we shall never be able to monetise our gas and may still be flaring for sometimes into the considerable future," he said.
While decrying the delay in taking the Final Investment Decision (FID) for Train 7, Shonekan described as unacceptable, the argument that gas export should wait for gas to power projects.
He noted that with a gas reserve of 187 trillion cubic feet, the country has more than enough gas for every project, adding that domestic gas and export gas are not in competition.
"We must also prove to the world that we are a country that is capable of doing more than one project at a time. We are competent adults capable of taking right decisions and making the right investments for our future. This is why I call on the President of the Federal Republic of Nigeria to immediately order the acceleration of these gas projects in the interest of this country. Train 7 is a low-hanging fruit. I urge the government to immediately pursue that," he said.
According to him, from the stand point of investment: it will cost Nigeria nothing as the project will be built with third-party loans, adding that Nigeria LNG Limited has solid credit ratings and can raise funds with relative ease.
"I am not entirely sure about what is delaying train seven. I gather that sales and purchase agreements for it were signed five years ago with buyers. Whatever might be delaying train seven, I call on the government to step in and ensure that the construction of that train takes off immediately. The time for it is now," he added.
He was however upbeat that Brass LNG was about to take FID for 20 million metric tonnes, while OK LNG was in consideration for 2014 but added that these efforts were grossly inadequate.
"With more gas reserves than Australia we cannot constrain ourselves to less than half of their output. Also, it is almost a shame that with more gas reserves, we produce less than 5,000 megawatts of power compared to Australia's 265,000 megawatts," he said.