April 16, 2024

NNPC, Golar LNG sign MoU for establishment of floating LNG plant in Nigeria

Oredola Adeola

 

In furtherance of its efforts to deepen Nigeria’s domestic gas utilization and enhance gas export in Nigeria, the Nigerian National Petroleum Company Limited (NNPCL) has signed a Memorandum of Understanding (MoU) with a Golar LNG (GLNG), Norwegian company to build a Floating Liquified Natural Gas (LNG) plant in Nigeria

 

Mele Kyari, Group Chief Executive Officer(GCEO NNPCL) and Mr. Karl Fredrik Staubo, CEO, Golar LNG, signed the agreement on behalf of their respective companies during a brief ceremony held at the NNPCTower in Abuja, on Wednesday.

Golar LNG is one of the world’s largest independent owners and operators of marine-based LNG midstream infrastructure that is active in the liquefaction, transportation, and regasification of natural gas.

The  new FLNG deal between Golar and NNPCL is coming after the company’s failure to complete a similar negotiations with the Lagos State Government on the acquisition of its Floating Storage and Regasification Unit (FSRU) Golar Tundra or the Golar Spirit.

Olalere Odusote, Commissioner for Energy and Mineral Resources, Lagos State, had during the DLO Power Roundtable in London IN 2021, said that the state government was negotiating with Golar LNG to acquire one of the FSRU as part of efforts to guarantee the uptake of gas to ensure the bankability of a 3,000-megawatt power project.

He however confirmed in an exclusive chat with EnergyDay that the deal did not scale through.

According to him, the negotiations over the deal with Golar LNG were suggested five (5) years ago, but the market wasn’t ready, and the matter died.

Golar has a fleet of 16 LNG carriers and eight FSRUs but has said it plans to expand into the broader LNG business by operating production facilities at the upstream end and participating in power projects at the downstream end.

EnergyDay however gathered that the new project is likely to support Nigeria’s gas expansion programme and the plan by the country to increase its LNG output level to meet domestic needs and meet the ramp in global gas demand.

The Nigeria NLG(NLNG) dropped from above 22 million metric tons per year(mmt/y) to about 14 mmt/y due to the activities of vandals and other economic sabotage, thus affecting its 10 percent share of the global LNG export market, in 2021, which has dropped to around 5 percent in 2023.