OMOTOWA: LNG MARKET REMAINS ROBUST, DESPITE SHALE GAS

Your question on the new government and Train 7, I think our focus remains that we continue to work with our shareholders as we have been doing and you know that we have a couple of shareholders that are directly involved in the project but we also have stakeholders that are involved in our gas supply side, the joint ventures as well and we just continue working with all stakeholders to get these projects through.

There are still a number of works that we are doing and I think that we will continue to do those works and when it comes to the time of FDI, we will be able to then approach our shareholders to seek for approval.

What you must remember is that it was in 2008 that we first did a lot of the pre-FID type work. For example, in 2008 we tendered for the construction of that Train 7 plant.

Many of those tenders have elapsed because it is just too long. So, we still have to re-tender them to get the new cost of building the project.

There is a lot of works we need to do with the gas suppliers to make sure that they have enough money to build the gas infrastructures to be able to transport them to us.

So, all the works we are doing and working with all the shareholders to be able to achieve that and it is when we complete that that we will indeed then go for an FID. We are optimistic that our shareholders have remained supportive of the project and we will get the necessary support when we come for and FID. How soon will you complete those works and go for FID for Train 7? ering process as I mentioned but you also need quite sometime to also resolve your gas supply issues. Remember there are joint venture gas suppliers, who have to resolve the issues around funding that they have mentioned clearly that they have a challenge; issues around the Petroleum Industry Bill (PIB) that they have indicated that they are working with the government. So, those will take time but on the critical part of course, is for us to indeed complete our own technical work; complete our own tender and be able to go to FID but I think at the very least, we still need about two years on those activities. Do you envisage the possibility of diversification from the LNG business in the foreseeable future? There are two sides to that. We are very confident that the gas business remains a very lucrative business and a strong platform for the company.

We don’t have concern that we will have a company that will not be successful even on gas. As I mentioned, the world needs more gas because the world is switching from other energy sources because they are less environmentally friendly. So, we believe that we continue to see a growth; all the analysts in the world will tell you that growth in gas is certain.

So, we continue to see that. Of course, every company gets to a stage in its maturity that it will start to look at diversification and it is not unlikely that as a company, we will get to that point in the future when we will start looking at alternative businesses that we will go to. All I can say to you now is that as shareholders to the company are looking everything at opportunities and at the right time, we see whether diversification into other industries at the right time but as of today, we remain confident that gas remains a huge area where there is huge demand and we should continue to remain successful.

What we do not want to do is to divert attention of a business that is still very strong, very robust and you divert its attention into business very quickly. Remember we are pioneer company in this country; we are just 15 years old. If we start rushing to diversification, it is not unlikely that you will create huge capacity challenge for the organisation. So, we are not there yet, but of course, with time, it is not unlikely that you will see diversification into the future. You said the NLNG has contributed significantly to reduce gas flaring in Nigeria. Could you please give us your contribution in numerical terms? The issue to remember is the reduction of gas flaring continues on day-by-day basis . So, I won’t be able to say to you today that it is exactly XY per cent; I think the most authoritative body to give you that figure is the Department of Petroleum Resources (DPR) because they see that on day-to-day basis but all I can tell you is that for us as a company, we have already utilised more than four Trillion Cubic Feet of gas that use to be flared; we have already utilised that to produce more than 30 billion worth of value that we have already produced from gas that used to be flared and the figures as I said have been brought down significantly. Before we came on board, this country was flaring close to 75 per cent ourselves has been a major contributor to the level it has been down today, which is around 20 per cent. But the exact figure can only be given by the DPR. What are you doing to maintain your market share or your marketing strategy for the maturing contracts in the current trains? It was only last week or so that I had to look at the preliminary status paper in that regard . As you know LNG contracts are typically 20 to 25 years in order to align with the lifespan of the and the first of such contracts will mature I think around the year 2021 but it is a sign of our pro-activeness we are already looking at the marketing strategy for those trains or those contracts that are maturing.

And that those marketing activities are going to start this year. I do not want to say too much because we are in a competitive market but I think that when we have established long term relationship with offtakers and they have come to see NLNG as a reliable partner that supplies LNG of the highest quality.

One of our strength as far as our customers are concerned is our ability to deliver. I have no doubt in my mind that we are going to market those trains successfully and in good time for that matter.