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The Nigerian energy sub sector is currently in serious dilemma following the observed failure of the Federal Government and other shareholders of the Nigeria LNG Limited to take a Final Investment Decision (FID) on the company’s Train 7 project at a meeting Thursday last week.
FID is the oxygen needed to drive clear and strategic investment on businesses in need of trust and deep pocket financing where parties will seal commitments needed for effective takeoff of activities.
The Train 7 project, which had been delayed for over 10 years, aims to increase the company’s production capacity from 22 metric tonnes per annum to about 30 MTPA, and would form part of the investment of over $10bn including the upstream scope of the LNG value chain, according to the company.
The needed FID on both NLNG Train 7 and Brass LNG has lingered for too long and may create shocks on the confidence of international investors who had been attracted to the deal earlier before now.
Recall that the NLNG is jointly owned by the Federal Government, represented by the Nigerian National Petroleum Corporation (49 per cent), and three international oil companies, namely Shell (25.6 per cent), Total (15 per cent) and Eni (10.4 per cent).
Business Hilights recalls that the GMD of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari had earlier in the year assured that all hands were on deck for the FID latest before the end of December.
He had at various occasions assured that the NLNG Train 7 FID will not be delayed as the agreement had in place, adding that all was set for the take-off of the project as the FID will be taken last week.
However, there had been an unusual calm since the failure of the decision Thursday last without any form of statement from the government or stakeholders up till now on why the FID failed.
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