$18 billion Brass LNG project for review

[Edoman]

$18 billion Brass LNG project for review
November 27, 2019
 
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The Senate on Tuesday summoned the management of the Nigerian National Petroleum Corporation (NNPC) and the management of the Brass Liquified Natural Gas (LNG), to brief it on the state of the project which was awarded at the cost of $18billion about 15 years ago.

The resolutions of the upper chamber followed a motion titled: “The need to ensure immediate review of the Brass LNG Project in Brass Island, Bayelsa State” sponsored by the Senator representing Bayelsa East, Biobarakuma Degi-Eremienyo and 26 others.

The Senate also urged the Federal Government to create an enabling environment for reputable oil and gas companies to take over the 17 per cent shares each previously owned by Conoco Philips and Total, while taking the necessary steps to ensure the revival of the Brass LNG project.

Degi-Eremienyo in his lead debate noted that the project had gulped about $1.2billion as at 2011, covering early site works and maintenance after which it was abandoned.

He said that the Brass LNG is a green field project established to operate LNG following agreement signed in 2003 by four shareholders – the NNPC with 49 per cent shares while Conoco Philips, Total and ENI International had 17 per cent shares each.

He disclosed that the Federal Government conceptualised and eventually brought to stream the LNG project to convert the huge gas resources being wasted through gas flaring.

He added that the idea behind the project was to eliminate negative environmental impact and to essentially generate revenue for faster economic growth and development.

According to him, former President Olusegun Obasanjo performed the ground breaking ceremony for the take off of the project in May 2007 after the award of contract for the Front-End Engineering Design, FEED to Bechtel Corporation in late 2004 for two LNG trains with a total capacity of 10million metric tons per year.

In October 2007, he said that the Brass LNG awarded the Nigerian Westminster Dredging and Marine (NWDM) Limited, while the company also signed social contract agreement with primary host communities – Okpoama, Ewoama and Twon Brass on December 14 of the same year.

Degi-Eremienyo said that if revived, the  activities of the LNG project would “attract local and multi-national companies to Brass Island, which will enhance socio-economic development and increase the foreign exchange earnings of the country.”

He said that the Brass LNG would create about 10, 000 jobs when fully operational.

He further noted that the Brass LNG would also actively promote local content, sustainable development, make strategic investment in remote areas in line with the federal government policy, develop and monetize some of Nigeria’s abundant gas reserves that would otherwise remain stranded, and increase domestic liquefied petroleum gas supply, among others.

The Senator lamented that the project had suffered several setbacks resulting unnecessary delays in the signing of its final investment decision, FID, which he said led to the di-investment of two shareholders, the Conoco Philips and Total, leaving only NNPC and ENI International.

He insisted that the moribund state of the project could “rightly be described as consciously organised sabotage by several stakeholders including the NNPC through diversion of funds budgeted and provided for the execution of the project.”

Senators in their contribution support the motion.