Energy Institute links withdrawal of $30bn LNG partners to political interference
More details have emerged on why the planned $20bn Brass LNG project in Bayelsa State and $9.8bn Olokola LNG project on the border town between Ogun and Ondo states initiated in 2003 and 2005 respectively, suffered lack of Final Investment Decisions (FIDs) over the years.
In an interview, Director, Emerald Energy Institute (EEI), University of Port Harcourt, Prof. Wumi Iledare, revealed that apart from the fact that there are other economies deepening their transparent investments in the sector, Nigeria’s case is largely frustrated by political interference.
He lamented that “Politics tends to hamper the growth of the industry. It is not that we don’t have competent people but the political interference and the prism through which we look at business decisions is not particularly favourable to investors.”
“I think there is a glut in the market; the spot market is developing, and then you look at our location relative to the destinations. You have some emerging LNG producers that we have to compete with. There were opportunities that Nigeria failed to take advantage of. It has to do with the governance of the industry,” Iledare noted.
Business Hilights recalls that for more than two years after the Nigerian National Petroleum Corporation (NNPC) reiterated its commitment to two Liquefied Natural Gas (LNG) projects in the country, there is still uncertainty over whether the multibillion-dollar projects will come on stream.
Other industry experts traced the key challenges of the multibillion dollars schemes to lack of Final Investment Decisions over the years, saying while Nigeria’s LNG projects continue to suffer delays, other countries, including Mozambique and the United States, are pushing ahead with their own projects.
Reuters had earlier this month reported that US independent energy producer, Anadarko, moved closer to an FID to build a giant LNG terminal in Mozambique after signing up an Indian buyer for the gas and saying another deal was imminent.
Anadarko and Exxon Mobil are expected to sanction two separate but neighbouring LNG projects in Mozambique this year after finding large offshore gas deposits, turning the African nation into a major global gas exporter, according to the report.
The Energy Information Administration projected in December that US LNG export capacity will reach 8.9 billion cubic feet per day by the end of 2019 from 3.6 Bcfpd, making it the third largest in the world behind Australia and Qatar.
Experts who have been following developments on the two mega LNG projects recall that the Brass LNG project, which was designed to produce 10 million metric tonnes per annum, was to be built by the NNPC, Chevron, ConocoPhillips and Eni Group. But ConocoPhillips and Chevron withdrew from the project due to bureaucratic bottlenecks apparently from the government.
Also, the OK LNG project, which was also designed to produce an initial 10 million metric tonnes per annum, was being built through a joint venture by the NNPC with Royal Dutch Shell, Chevron and BG Group. But all the international oil companies have pulled out of the project.
