The other week, my wife took me to see an opera. As the performance was in Italian, an electronic display high above the stage carried subtitles, so culturally challenged people like me could follow the plot.
I would have loved to have seen a similar machine in use at the recent Gastech conference in Vienna for the presentations on the Nigeria and Sakhalin Island LNG schemes.
Theo Oerlemans, managing director of Nigeria LNG Ltd., reported that the much-delayed liquefied natural gas (LNG) export plant and terminal are well under way to completion at Bonny Island, Nigeria.
Frank Duffield, president of Sakhalin Energy Investment Co. Ltd., said a planned development of fields off Russia's Sakhalin Island, with export of gas as LNG, is being held up in Russia's parliament.
Oerlemans and Duffield have two things in common. They have been seconded from Royal Dutch/Shell, leading partner in both projects. And, like Figaro in the opera, they talk of their schemes in a courtly manner.
Nigerian progress
Nigeria LNG has begun work on a $4.5 billion project, with capacity to export 4.1 million metric tons/year of LNG during 221/2 years beginning in 1999. The project was first proposed almost 30 years ago.
Explaining how the project was eventually kick-started after so many years, Oerlemans said, "Government and shareholders agreed that the project company, Nigeria LNG Ltd., would be operated as an independent, private sector company.
"Of prime importance was also the agreement to provide all funding up front, so that there could not be any uncertainty about funding available for completion."
Russian impasse
Sakhalin Energy plans to develop Lunskoye and Piltun-Astokhskoye offshore gas fields to produce 1 bcfd of gas to feed a 6 million metric ton/year LNG plant for 20 years.
But the combine will not start major work in Sakhalin until Russia's parliament has set in concrete new legislation for production-sharing contracts.
Duffield said of inadequate Russian production-sharing legislation passed in December 1995, "The law was not sufficient in itself to meet our contractual agreements. We are confident that the authorities fully understand that further measures are critical for triggering investment and are, therefore, committed to putting them in place."
Imaginary subtitles
In my imagination, a subtitle display read as follows while Oerlemans spoke: "We made progress by putting our money in an escrow account, so Nigerian government could no longer raid the project funds."
As Duffield spoke, my imaginary subtitle machine read, "Russia's government has realized oil and gas companies have lost patience, but it is so bogged down in internal squabbles, it cannot pass effective laws."
Operas and LNG projects are magnificent and intricate, not to say extremely expensive. Librettists must match the style of the music, otherwise the outcome is simply not opera.
Similarly, LNG project leaders must match the elliptical style of the politicians and diplomats they confer with. A more blunt approach, and the outcome would simply not be an LNG project.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.
