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Monday, 13 March 2017

How FG made Brass, OKLNG projects fail — Gaius-Obaseki, others

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By Michael Eboh

ABUJA—Chairman of Brass Liquefied Natural Gas, LNG, Mr. Jackson Gaius-Obaseki, and other experts in the petroleum industry, yesterday, blamed the Federal Government for the collapse and failures recorded in the multi-billion dollars Brass Liquefied Natural Gas and Olokola Liquefied Natural Gas, OKLNG, projects.

Gaius-Obaseki; Mr. Alex Neyin, a former chairman of the Board of the Society of Petroleum Explorationists, SPE and Mr.  Yemi Oke, a senior lecturer in the Faculty of Law at the University of Lagos, UNILAG, spoke in an interview monitored on the Nigerian Television Authority, NTA.

Also present among the discussants were Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mr. Maikanti Baru.

The Federal Government had spent over $1.2 billion already on the Brass LNG project and about $600 million on the OKLNG projects which started in 2003 and 2005 respectively.

Gaius-Obaseki stated that the decision by the Federal Government to undertake the three LNG projects — Nigeria LNG Train 7, Olokola and Brass LNG — led to the failure to complete any of the projects several years after their conception.

He said:  “In my view, at the best of time for Nigeria, we do not have the resources, human and financial, to pursue three LNG projects at the same time. That is where the problem came from. Political or no political, all the projects would still had happened, if one came after the other.”

He argued that the country does not have the resources to pursue three LNG projects at the same time, stating that the government should have concentrated in finishing one of the projects before undertaking another.

Point of no return for Brass; $1.15bn spent so far

He said: “It is important to also know that I believe Brass has reached the point of no return.

“The fundamentals, the reasons are still there, valid today and you have expended $1.15 billion already; expectations are high; communities are giving land already. Really, we shouldn’t look anywhere else. Complete Brass, let OKLNG follow.”

 NNPC defends  FG’s position

However, Maikanti Baru explained that at the time the OKLNG project started, the market was showing robustness in terms of being able to absorb some extra volumes that would be coming from OKLNG.

Baru said:“The decisions were right at that time, because the market was postulating. At the moment, the market is a bit depressed. Train 7 is very likely because all the indications for having it, the various parameters to be able to move forward are there.

“We are finalizing the major various stumbling blocks in terms of gas supply. That is the major stumbling block holding back the Train 7. As soon as we do it, we are going forward for FID. In about 36 months, we are going to take FID on Train 7.”

In his submission, Alex Neyin said it was ridiculous for the country to dabble into many LNG projects at the same time, stating specifically that the country could not have Brass LNG going on and set up another, in form of the OKLNG, declaring also that this raises concerns among potential investors.

He also stated that the country lacked the capability to manage two LNG projects at the same time, when it had the NLNG Train 7 ready to go.

Similarly, in a statement issued by the NNPC after the interview, Baru said the Federal Government would do everything to ensure the take-off of Bonny NLNG Train 7 and the Brass LNG in the months ahead, after which the Olokola LNG would come on board, if the fundamentals were strong.

He stated that the NNPC was refocusing on the Brass LNG and rebuilding the confidence of investors on the project after the exit of Conocophillips a few years ago, adding that Nigerians and the Federal Government would gain a lot from the project in terms of taxes, royalties and profits.

He noted that when the project comes on stream, it would create massive employment opportunities for Nigerians.

 

 

 

 

The post How FG made Brass, OKLNG projects fail — Gaius-Obaseki, others appeared first on Vanguard News.

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