Ships’ acquisition: NLNG, Samsung, Hyundai to sign N254bn agreement

BY MICHAEL EBOH with Agency Report

Nigeria Liquefied Natural Gas Company, NLNG, is set to sign a N254.4 billion ($1.6 billion) agreement with South Korea’s Samsung Heavy Industries and Hyundai to acquire six ships.

The agreements which will be signed this week will see NLNG acquiring six Liquefied Natural Gas, LNG, carrier ships from Samsung and Hyundai.

Reports say two banks — BNP Paribas and Guaranty Trust Bank Plc, are brokering a $1.6 billion loan to help fund acquisition of the vessels.

The parties are expected to sign the financing documents next week, a banking source said.

NLNG, jointly owned by the Nigerian National Petroleum Corporation, NNPC, who is the majority shareholder and Royal Dutch Shell, had last year disclosed that it has contacted global banks to appoint advisers in other to explore the best option to raise funds.
Sources said the loan was being structured as a medium to long term financing with the close expected by the end of March 2013.

According to the source, the agreement to buy the ships should be signed before today or tomorrow, adding that NLNG executives had travelled to South Korea for the signing.

The source said the loan would be medium-to-long term, with the deal expected to be sealed by the end of March.

NLNG had said last year it would seek loans from the international market to expand the operations of its shipping subsidiary Bonny Gas Transport Limited, which currently has 24 LNG ships.

The company was set up over two decades ago to harness Nigeria’s natural gas resources and produce liquefied natural gas and natural gas liquids for export. It has long-term supply contracts with buyers in Italy, Spain, Turkey, Portugal and France and also sells on the spot market.

NLNG has a capacity to produce 22 million metric tonnes of liquefied gas a year. It obtains its gas supply from the upstream oil companies and liquefies it for export.