Nigerian CommunicationWeek

Brass LNG Suffers Multiple Headaches

Dr. Jackson Gaius-Obaseki, Chairman, Brass Liquefied Natural Gas Company

The Brass Liquefied Natural Gas (LNG) project, designed to produce 10 million metric tonnes of LNG per year may be dead on arrival after all, because the economics does not add up, Nigeria CommunicationsWeek investigations can now reveal.

Fresh facts gleaned from the industry suggested that Brass LNG which has been on the drawing board for several years may never leave the shelf unless the federal government of Nigeria gives sovereign guarantees to the promoters of the project.

Industry sources said the cost benefit analysis may be negative on the long run, leaving promoters of the $15 billion project clay footed.

Nigerian National Petroleum Corporation (NNPC) holds 49 per cent equity in the project, while United ConocoPhillips; Total, French oil giant; and ENI, Italian company hold 17 per cent stake apiece in the Brass LNG Ltd.

Already, ConocoPhillips, a United States owned oil company has pulled out of the project, and divested from the country without giving any reasons.

Meanwhile, the NNPC, Nigeria’s national oil company is dire financial straits because it does not operate as a company but depends on the federal government for handouts.

The lethargy of the partners; dearth of finance and lack of political will have all served to hobble the take-off of the project.

Also the insecurity in the Niger Delta; non-passage of the Petroleum Industry Bill (PIB); and the unfavourable gas pricing in the country have served to exacerbate fears over the project.

But Andrew Yakubu, GMD, NNPC, waxing hopeful, told journalists in November 2012 that the final investment decision (FID) on the project would be taken this year.

The FID was supposed to have been signed by mid-2010 but have been postponed severally because the various impediments hindering the project were yet to be resolved.

The LNG project is expected to raise Nigeria’s gas export volumes, create over 20,000 jobs and improve revenue receipt for the government.

 

 

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