The Final Investment Decision on the two-train, 10 million metric tonne per year LNG project had suffered several setbacks especially after indications by one of the project’s promoters, ConocoPhillips, that it wanted to sell off its Nigerian assets.
Gaius-Obaseki also gave an assurance that contractual agreement for the supply of gas to Brass LNG would not be contravened by suppliers upon the project’s completion and eventual operation.
He said, “In recent times, there have been speculations about the future of the project as induced by news in several media channels that ConocoPhillips, which is one of our shareholders, plans to divest from Nigeria and, in effect, from Brass LNG Limited.
“In June 2010, in company with other stakeholders, I took ConocoPhillips to task and they assured that they would remain and be part of decisions to move the project forward. Following this assurance, the Invitation to Tender was launched and this led to our choice of preferred tenderers.
“Again, when the news of their exit from Nigeria came on air, I, in company with Nigerian National Petroleum Corporation nominated directors, met with COP executive management on April 27, 2012. COP confirmed its intention of a possible exit from Nigeria while committing to the realisation of the project through supporting it to FID.”
He added, “By the end of the first quarter of 2012, management presented to the board their Overall Integrated Master Schedule and estimated that with full commitment and unwavering efforts by all, the FID is possible within the first quarter of 2013, with possible mitigation efforts bringing it earlier.
“This is a possibility noting that the major fundamentals required — that is gas supply, Engineering, Procurement and Construction contracting, funding plan and LNG sales — are all nearing closure.
“The bids for the major EPC contracts were received, have been opened and are currently being evaluated. Success was achieved in reducing the estimated project capital expenditure while the negotiation for the Gas Supply Agreement with gas suppliers will commence soon.”
The chairman confirmed that ConocoPhillips remained committed to the project, recently approving a budget for the FID.
He also disclosed that the LNG sales negotiation processes had been concluded while negotiation with marketing joint ventures was at a final stage.
NNPC holds 30 per cent equity in the Brass LNG project while Bayelsa State government has 10 per cent. LNG Japan has four per cent; Itochu Corporation, three per cent, and a joint venture between Sahara and Sempra Energy holds two per cent.
American oil group ConocoPhillips; French firm, Total and Italian firm, Eni also hold 17 per cent stake each.
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