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Nigeria LNG to add third train at Bonny Island

March 22, 1999

Nigeria LNG Ltd. (NLNG) let an engineering, procurement, and construction contract for a third liquefied natural gas (LNG) train to be built at its Bonny Island export project. The contract was awarded to the TSKJ consortium. The group, which comprises Technip SA, Snamprogetti SpA, Kellogg Brown & Root, and JGC Corp., is building two LNG trains at the site. The first two LNG trains will come on stream, respectively, in the summer of 1999 and at the end of 1999. The third train will be completed

Nigeria LNG Ltd. (NLNG) let an engineering, procurement, and construction contract for a third liquefied natural gas (LNG) train to be built at its Bonny Island export project.

The contract was awarded to the TSKJ consortium. The group, which comprises Technip SA, Snamprogetti SpA, Kellogg Brown & Root, and JGC Corp., is building two LNG trains at the site. The first two LNG trains will come on stream, respectively, in the summer of 1999 and at the end of 1999. The third train will be completed in 2003.

The estimated cost of the expansion is $1.2 billion, said Snamprogetti.

Leading project partner Shell Gas BV said the interest holders have put up $600 million to fund the expansion project. Shell said the expansion would also be funded with revenues and surpluses from the first two trains. NLNG shareholders are Nigerian National Petroleum Corp. 49%, technical adviser Shell 25.6%, Elf Aquitaine SA 15.4%, and Agip International BV 10%.

The twin-train project nearing completion is expected to have capacity to produce 5.9 million metric tons/year of LNG (OGJ, Dec. 21, 1998, p. 36). The third train will increase the plant's capacity by 50%, said Shell.

Associated gas which is currently flared in Nigeria's Shell-operated onshore fields will be used as feedstock, and will also provide an additional 1 million metric tons/year of LPG for export to South America and Western Europe.

Shell said that more than 70% of the LNG from the third train has been promised to Enagas SA of Spain under a 21-year supply deal. Discussions with other potential buyers for the remaining volumes are reportedly well advanced.

The expansion is also anticipated to require deployment of two new LNG carriers. Shell says the tender exercise for acquisition of two newbuild LNG ships is also well advanced.

Besides using flared gas, the third LNG train is also expected to enable immediate utilization of associated gas from new onshore and offshore developments that Shell is pursuing in Nigeria (OGJ, Feb. 15, 1999, p. 32).