14 July 2014

Nigeria: Why FID On OKLNG, Brass Lng Was Delayed - NNPC Boss

The Group Managing Director of Nigerian National Petroleum Corporation NNPC Engineer Andy Yakubu has given reasons why Final Investment Decision (FID ) that will give financial backing to the development of Okolo Liquefied Natural Gas ( OKLNG ) limited and Brass Liquefied Natural Gas limited ( Brass LNG) was delayed .

Yakubu who spoke in Uyo, Akwa Ibom state over the weekend during capacity building workshop organised for energy Correspondents said that no investor would talk of signing Final investment decision any long gestation that spread over 20 years when the coast and the parameters are not clear.

According to him NNPC had prepared the ground and set the ball rolling for the signing of the binding document that will give legal and financial backing to the development of the projects before BG and Conoco Philips pull out from the projects .

He explained that Conoco Phillips for instance is the technical partner and the provider of technology for the development of Brass LNG, while the pull out by Chevron and BG from OKLNG also affected the development of the projects as initially planned .

NNPC boss noted that international players especially those who invest on long term gestation projects are very conscious of the sacredness of the deal they seal with nations and corporate organizations, adding that he won't commit Nigeria to prolonged legal international tussle when the nation is out to attract foreign direct investment for economic growth and development.

He observed that Oando Nigeria that acquired the assets of Conoco Phillips in Nigeria lacks the technology for the development of Brass LNG ,adding that NNPC is still searching for new investor , as every issue has to be sorted out before committing funds to such a huge investment.

The delay in the development of the two projects had prevented Nigeria from earning over $3.5billion revenue per annum and denied Nigerians about 50,000 jobs during the projects construction.

Daily Independent gathered The FID on the Brass LNG project suffered a major setback at the same time as ConocoPhillips, in 2013, announced the intention to divest its Nigerian assets.

As a result, Brass LNG is presently seeking third-party investors to take on the remaining 17 % stake. A senior official of one of the shareholders involved in one of the projects, who pleaded for anonymity said, "With the exit of ConocoPhillips from the Brass LNG project, it has been challenging finding who will replace ConocoPhillips and take over its shareholding.."


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