Nigeria LNG signs 20-year gas supply agreement for Train 7

(Reuters) - Nigeria LNG said on Friday it had signed a 20-year gas supply agreement with joint venture partners for the long-awaited Train 7 project to expand its liquefied natural gas plant on Bonny Island.

NLNG, which produces liquefied natural gas (LNG) for export, is owned by state-run Nigerian National Petroleum Corporation (NNPC) and foreign energy firms Royal Dutch Shell, Total and ENI, said it had signed a feed gas agreement for Train 7.

The agreement is one of the key conditions for a final investment decision on Train 7, NLNG said in a statement, adding it needed a confirmed gas supply before building the plant.

NLNG operates six LNG processing units, known as trains, on Bonny Island.

The project, which 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.

Commodities trader Vitol has signed a 10-year deal with NLNG to buy 500,000 tonnes of LNG per year, boosting its long-term presence on the market.

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