By Clara Nwachukwu

The Final Investment Decision, FID, for Brass Liquefied Natural Gas, LNG, project, which has been postponed many times over, may be taken before the end of the first quarter of 2011, a top management official of the gas company has said.

The source, which spoke to Vanguard on the sidelines of the just_concluded Nigerian Gas Association, NGA, International Conference and Exhibition in Abuja, said, “There is no going back on the FID. We are now in the process of evaluating the bids for the project.

This may last for about two months, after which it will be submitted to the shareholders to analyse and determine the feasibility of the project and thereafter, proceed to meet on the FID on or before the end of the first quarter of next year.”

The FID is being considered even as the equity holding of the Nigerian National Petroleum Corporation, NNPC, may have been reduced to 34 percent.
The NNPC is the senior partner in the Joint Venture, JV project with 49 percent, where the other partners, Eni, Total and Conoco_Philips, each have 17 percent equity.

Our source insisted that contrary to speculations, shareholders have not abandoned the project, saying, “How can we abandon a project we have already spent over $700m, including the site, it’s just not possible.”

Consortia bidders
Investigations reveal that about five consortia, which include Daewoo, and TSJK, which built the Nigeria LNG in Bonny, make up the bunch that comprises about 15 different companies.

The interested companies had to form alliances s, no as single company has all the technical and financial capacities needed to construct the project, which is located in Bayelsa State.
Besides, the management of the company said it being careful evaluating the bids to avoid past mistakes that accompanied the construction of such a huge project, and that whichever of the consortia gets the bid, will be strictly based on merit and due process.

Equity holding
Reports in the past indicated that shareholders may have abandoned the LNG project, over row on the equity holding, in which the Federal Government had allegedly tried to foist new shareholders on the existing ones by diluting the current equity holding.

But our source told Vanguard that, “There is no row whatsoever among the shareholders over equity. There are only four shareholders and they know themselves. So all those brandishing equity sales to Centrica Gas or LNG Japan, are individual shareholders who want to sell some percentage of their equities and not on the stable of Brass LNG Board.”
Accordingly, Vanguard understood that the five percent equity given to both Bayelsa and Rivers state governments were from NNPC’s portion of 49 percent in the overall structure.

This has reduced the NNPC’s stake to 39 percent and may reduce further to 34 percent, if the deal with LNG Japan pulls through, which is almost likely, as the NNPC appears very enthusiastic with the alliance, with all the talk about petrochemical plants as an added perk.
However, no matter which shareholder sell what, none of the new entrants can sit on the board of the company without acquiring up to 10 percent. As such all new shareholders, including the state governments will remain nominal shareholders.
Preparing for project realisation

Ahead of the FID and to demonstrate commitment to the project, the Brass LNG management said it has been involved in a lot of training, skills acquisition and team building for Nigerians both within and outside the country.

In particular, the management said the team building is very important because, “All the staff of Brass were all seconded from the shareholders companies, and have to undergo re_orientation in line with the objectives and mission of the new company, away from their old ones.”