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Saipem, Others Win NLNG’s Train 7 Contract, To Invest $10bn

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A Joint Venture consortium comprising  Saipem of Italy, Japan’s Chiyoda and Daewoo of South Korea, has emerged the preferred bidder for the Nigerian Liquefied Natural Gas, I (NLNG), Train 7 project.

The consortium was announced in Abuja, at the signing of the Letter of Intent for the NLNG Train 7 EPC contract.

Managing director of the NLNG, Mr. Tony Attah, who made the announcement stated that Letter of Intent is a percusor to the commencement of the project, while he disclosed that the Final Investment Decision for the Train 7 would be signed by October ending.

The Train 7 project is expected to boost NLNG capacity from 22 million tonnes to 30 million tonnes, while it would boost Nigeria’s Liquefied Petroleum Gas, LPG, production, thereby, helping to reduce import of the commodity.

Attah explained that with the presentation of the Letter of Intent to the SCD JV Consortium, the group had been awarded the contract to undertake the Engineering, Procurement and Construction, EPC, for the Train 7 project.

He added that with the issuance of the Letter of Intent, the NLNG was now closer to the signing of the Final Investment Decision, FID, of the Train 7 project, which he disclosed would be attained before the end of October.

According to him, the company had concluded arrangements to ensure that after the signing of the FID, the project would be completed within four to five years, as this would be critical to it remaining competitive and profitable in the global market.

The NLNG chief executive explained that Train 7 is the company’s sure way to attaining the 35 per cent increase in its production capacity, from 22 million tonnes per annum, MTPA, to 30 MTPA.

He noted that at construction phase, the NLNG Train 7 project would attract an investment of over $7 billion; boost Foreign Direct Investment, FDI, profile of the country, and provide about 10,000 jobs during the construction stage.

He said, “With Train 7 on board our operation, we can consistently continue to deliver on our vision of being a global LNG company helping to build a better Nigeria.

“We can only achieve this by sustaining our relevance in the global LNG market and in turn continue to contribute significantly to the economic base of the nation through the payment of our taxes and applicable levies; our Corporate Social Responsibility, CSR, initiatives; our LPG supply to the domestic market and our support for indigenous capacity development.”

On his part, group managing director of the NNPC, Mallam Mele Kyari, affirmed that there was no going back on taking the FID in October, stressing that everything needed to be done was being done to make the FID a reality on the scheduled date.

The GMD who was represented by the corporation’s general manager, New LNG, Engr. Ahmed Dikko, said the management of NNPC was very passionate about the project because it held the potential of boosting activities in the oil and gas sector and ultimately stimulating growth in the nation’s economy.

“Before us today, is the signing of the Letter of Intent (LoI) for the Train 7 project. By 31st October, 2019, we will all gather together again to sign the dotted lines for the Final Investment Decision (FID) of the Train 7 project. This is indeed the wish of NNPC as a shareholder, and I will like to reaffirm to you all our support to carry out all the realignment to make the project a reality”, the GMD stated.

He urged the other shareholders to start preparing for Trains 8, 9 and 10, while assuring the SCD Group, the consortium engaged for the Engineering, Procurement and Construction (EPC) of the Train 7 project, of the sustained support of NNPC towards the successful completion of the project.

Also speaking, executive secretary of the Nigerian Content Development and Monitoring Board, NCDMB, Engineer Simbi Wabote, informed the SCD JV Consortium that the Board expects full implementation of the agreed Nigerian Content levels as contained in the approved Nigerian Content Plan for  the Train-7 project, covering engineering, fabrication, civil works, local procurement, project services, logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, human capacity development, and jobs.

Wabote identified opportunities in the project for local businesses and investments to include the delivery of 100 per cent engineering of all non-cryogenic areas in-country, explaining that the total in-country engineering man hours is set at 55 per cent, exceeding the minimum level stipulated in the NOGICD Act.

He disclosed that on fabrication, the Train 7 scope will bring many of Nigeria’s fabrication yards roaring back into life with over 70,000 tonnes of in-country fabrication, covering condensate stabilization units, tanks, pipe-racks, flare system, non-cryogenic vessels, and many other spools and fittings.

The benefits, he explained, extends to site civil works on roads, piling, and jetties; 100 per cent local procurement of all LV and HV cables, non-cryogenic valves, protective paints and coatings, sacrificial anodes and many other direct procurement from our local manufacturing plants.

He said, “Those in the service industry are not left out with the target to assemble over 70 per cent of all non-cryogenic pumps and control valves in-country. Other spin-off opportunities include logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, and many more.

“The target job numbers are very exciting.  At its peak, the project will provide over 40,000 direct jobs and over 100,000 indirect and induced employment of over 100,000 workers.

“Beyond the project, there is also huge scope for local businesses to build capabilities in the maintenance of LNG plants especially in the area of cryogenics.”

In his goodwill message, Minister of State for Petroleum Resources, Mr. Timipre Sylva, noted that the project had been a long time coming, noting however, that the journey had been credible and thorough.

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