Nigeria LNG Revenue Fell 37% in 2015
Nigeria LNG generated revenues in 2015 of $6.83bn, down 37% from the previous year’s $10.79bn, according to the joint venture’s Facts and Figures on NLNG 2016 report published last week, due to lower oil and gas prices.
The venture, which comprises six liquefaction trains, paid a 2015 dividend of $1.04bn to state Nigerian National Petroleum Corp, down 25%. Dividends paid to foreign shareholders Royal Dutch Shell, Total and Eni net of withholding tax last year totaled $1.12bn, also 25% less than in 2014.
The report noted that cumulative dividends to both NNPC and the three international oil companies (IOCs), since these began to be paid out in 2004, have totaled almost $32bn. Cumulative capital investment by the venture, listed by the report only back as far as 1999, has been almost $15.7bn.
The report said that “NLNG's expansion plan under the ‘Train 7 Plus’ project, which will raise the liquefaction capacity to over 30mn t/yr, continues to make progress toward a Final Investment Decision (FID).”
NLNG has made similar remarks over the course of the past decade since Train 7 was first mooted; however Shell, Total and Eni now have more promising LNG investment priorities elsewhere in the world such as in Russia, Australia and Mozambique and scarcer capital available to invest.
In Nigeria the impetus instead is on delivering gas for the home market, in particular to power generators, because local gas prices have trended higher in recent years and are now about $2.50 to $3/mn Btu – so on a par with netbacks from LNG exports which have declined over the past three years.
NLNG currently manages 16 long-term LNG Sale & Purchase Agreements (SPAs) executed with 11 buyers on a delivered ex-ship basis and has also executed over 48 spot free-on-board LNG Master Sales Agreements (MSAs) with various companies across major LNG markets, last week's report noted. It also detailed 2015 tax and other payments to government, as well as payments for feed gas.
Cumulatively from 1999 to 2015 NLNG said it had converted 146bn m3 (5.16 trillion ft3) of associated gas into LNG exports "helping to reduce gas flaring by upstream companies." However much of what it liquefied in its first decade of operation to 2008 was non-associated gas.
Volume of LNG imports from Nigeria LNG last year increased by 1.9% to 19.5mn metric tons, according to data earlier this month from industry association GIIGNL which can be accessed here.
Shell reported April 18 in its transparency report that it had paid $4.95bn to Nigeria in tax in 2015, the bulk of which took the form of $3.6bn-worth of crude valued at market prices.
Mark Smedley