By Ekaterina Kravtsova
LONDON, Sept 11 (Reuters) - Nigeria LNG said on Wednesday it had moved closer to an investment decision on the long-awaited Train 7 project to expand its liquefied natural gas plant on Bonny Island.
The company said in a statement it had signed a letter of intent for the engineering, procurement and construction of Train 7, one of the key milestones towards a final investment decision (FID).
The letter was signed with a consortium consisting of Italy’s Saipem, Japan’s Chiyoda and South Korea’s Daewoo.
NLNG said it had also submitted earlier this month the evaluation of commercial bids for Train 7 to the Nigerian government, another step for the project to be approved.
“The Project will form part of the investment of over $10 billion including the upstream scope of the LNG value chain, thereby boosting the much needed Foreign Direct Investment (FDI) profile of Nigeria,” the statement said.
NLNG said the construction period after FID will last approximately four to five years.
The project that is expected to increase Nigeria’s LNG production by 35% to 30 million tonnes per annum (mtpa) has been delayed for several years.
A previous deadline for a Train 7 FID in the fourth quarter of 2018 was not met.
Nigeria was fifth largest LNG producer in the world last year, with its production declining. It lost its fourth place to the United States in 2018, according to the International Group of Liquefied Natural Gas Importers.
This year has seen a surge in financial approvals of LNG production projects, with a total of 62.8 mtpa capacity receiving final approvals. This is jump from 21 mtpa capacity approved last year and just 3.4 mtpa in 2017. (Reporting by Ekaterina Kravtsova; Editing by Susan Fenton and David Evans)