Eni & Partners Ink Deal To Expand LNG Production In Nigeria
Zacks Investment Research | Dec 29, 2019 11:54PM ET
Eni S.p.A. (NYSE:E) recently signed an expansion pact with its partners at the Bonny LNG plant in Nigeria. The $10-billion deal was inked to construct the Train 7 project, which received a final investment decision.
The project, which can boost Nigeria’s annual LNG production capacity from 22.5 million metric tons (MT) to 30 million MT, is expected to commence in 2024. While the new liquefication Train 7 can ramp up LNG production by 4.2 million MT per annum, an additional 3.4 million MT capacity will come from debottlenecking the existing trains.
The strategic LNG expansion move is expected to benefit Nigeria, which has more than 200 trillion cubic feet of proven gas reserves, by reducing the country’s dependency on oil revenues. With a volatile oil price environment, Nigeria’s decision to diversify its revenue sources is commendable. Moreover, production growth will likely offset this African nation’s declining LNG output, which pulled it down to the fifth spot among the world’s top LNG producers.
Currently, Nigeria Liquefied Natural Gas (NLNG) exports approximately 300 LNG cargoes per annum from the Bonny plant, which constitutes around 40% of global LNG supplies. Per reports, the Train 7 at the site can generate $20 billion worth of revenues for the local government alongside 10,000 and 40,000 direct and indirect jobs, respectively. Moreover, the plant is expected to expand to 12 trains in a few years’ time.
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