Brass LNG Optimistic Over Funding
May 19, 2008
Brass LNG Limited held its 4th Annual General Meeting and its 29th Board Meeting in Abuja over the weekend with high hopes that the Final Investment Decision (FID) for the project will be taken in December this year.
Stakeholders believed the feat could be achieved by creating an enabling environment necessary to make it not only economical to investors, but also possible to be executed on schedule.
The Federal Government, through Nigerian National Petroleum Corporation (NNPC) holds 49 percent equity of the Company while Eni, ConocoPhillips and Total each hold 17 percent.
Stakeholders of the company are of the view that the taking of final investment
decision on the project depends heavily on reaching agreement on the enablers
early enough to make the December deadline realistic.
Deliberations at the board of directors meeting consequently centered on how to
reach timely agreement with the project's shareholders on the enablers before
the end of this month in order to avert a delay in the taking of the FID by
December and the consequent failure to deliver the project on schedule.
Shareholders of the project are worried that if the enablers do not agreed by
end of May, it may be difficult to take FID as proposed.
The current schedule of the project puts first LNG shipment for the first
quarter of 2013. This is the schedule agreed to in the commercial agreement with
the buyers of the LNG to be produced at the Brass LNG plant. Six Buyers have
signed MoUs with Brass LNG to lift the products.
Authoritative sources disclosed that once commercial agreements are entered into
with off takers, there are standard provisions to the effect that penalties
would be paid every day there is a delay in the Delivery Schedule which, in this
instance, can be caused by a delay in the completion schedule.
In addition, a revenue loss of as much as $10 million dollars will be incurred
by Brass LNG every day of delay in the completion of the project.
Investigation revealed that funding is another issue on the mind of shareholders
as very shortly after the Final Investment Decision may have been taken, they
will be expected to deposit their equity proportion of the funds needed to
execute the project.
A revenue profile of upwards of $50 billion is expected to be earned by
the Federal Government from the project.
Currently, bush clearing is going on at the Brass Island site of the project by
indigenous Contractors sub-contracted by Nigeria Westminster Dredging and Marine
Limited which mobilised to site three months ago. It is expected that
Shareholders will do all that is possible to meet the expectations of all
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Brass LNG Limited
Brass Island Nigeria