Shareholders have abandoned the Brass Liquefied Natural Gas project after over $1.2billion had been spent on preliminary works, an amount enough to build a moderate power plant or refinery.
Conversely, the Nigeria Liquefied Natural Gas Limited’s plant on Bonny Island, Rivers State, is waxing stronger, with the Final Investment Decision for Train 7 of the plant having been taken recently while plans are afoot to also do trains 8 and 9. A top government source who spoke to our reporter about the Brass project recently said, “It is a very sad story I must say, honestly, I feel very saddened by what happened to Brass LNG, but you know that happened before this administration, so it is not something I really would like to talk about, but we have other options.
“We want to see how we can resuscitate it either as Brass LNG, or as Train 8 of Bonny LNG. We have not really come to a solution but we are just doing some damage control. The damage has already been done before we came in and it is unfortunate because we couldn’t have spent all that money on the project and just lose the project, it is unfortunate, but of course, you know mistakes are made as a country and then, of course, corrections are also made. So, we are trying to see how we can correct those mistakes.”
The Brass LNG was a greenfield project established to produce liquefied natural gas from a plant to be sited at Brass Island, Bayelsa State following the signing of an agreement in 2003 by four shareholders namely, NNPC, ConocoPhilips, Total and ENI International. NNPC was to hold 49 percent shares, while ConocoPhillips, Total and Eni were to hold 17 percent each. Former President Olusegun Obasanjo performed the groundbreaking ceremony for the take-off of the project in May 2007 after shareholders had awarded the contract for the FrontEnd Engineering Design (FEED) for two LNG trains, with a total production capacity of 10 million tons per annum, to United States’ Bechtel Corporation in 2004.
However, the project started suffering hiccups with the withdrawal of one of the shareholders, ConocoPhilips, from the project in 2014. Our correspondent gathered that the withdrawal threw spanner in the works and the other remaining shareholders, especially Eni and Total, started dragging their feet. A top NNPC official, who asked not to be named, blamed the collapse of the project on lack of strong commitment from shareholders.
Another factor that worked against Brass LNG is the fact that almost all the key investors in the NLNG project on Bonny Island, Rivers, were also involved in Brass, namely NNPC, Total and Eni. Thus, the decision to move on with the Final Investment Decision of NLNG Train 7 must have been a nail in the coffin of the Brass LNG project, an oil industry top source told our correspondent.
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