The Chairman, Brass Liquefied Natural Gas, LNG, Limited, Dr. Jackson Gaius-Obaseki, has expressed confidence that the Final Investment Decision, FID, for the project would be taken in the next couple of months.
This is because the management has stepped up efforts to ensure that the project receives the necessary support from all the key stakeholders.
Speaking at the 11th Annual General Meeting of the company in Abuja, Gaius-Obaseki commended the shareholders and stakeholders for their steadfastness and doggedness in supporting the Brass LNG project despite the challenges it had faced.
According to him, 2015 was an eventful one for Brass LNG, especially as it continued to forge tirelessly towards attaining FID on the project.
Listing some of the major milestones recorded in 2015, Gaius-Obaseki disclosed that the company was able to successfully achieve cost optimisation.
According to him, this was attained through the renegotiation of contract rates, commercial terms, scope of works and reclassification of contracts and purchase orders from dollars to naira denominations in compliance with the Central Bank of Nigeria, CBN’s directive.
He noted that this had allowed for significant cost savings in respect of the approved budget of the project, without giving further details.
He said that the Pre-Front End Engineering Design, Pre-FEED Concept Evaluation Study, PFCES, had been completed as well as the feed gas sensitivity scenarios, and the final reports submitted to the company.
Gaius-Obaseki also disclosed that the project site security contract for pre-FID had been awarded, while the Enterprise Resource Planning, ERP, a robust tool that will automate and create seamless processes within the company has been completed.
He insisted that the Brass LNG project was still very feasible and on course, despite the low price of crude oil in the international market.
He said: “We are not oblivious of the price collapse in the crude oil market, which must have caused concerns about the project viability and ability of the shareholders to execute same. In the light of this, management has taken steps to review the project concept with a view to drastically reviewing the capital expenditure, CAPEX.
“Report presented to the Board on this subject is very encouraging and makes the project realisable even in the current environment; without compromising the integrity of the project.”
He further noted that during the conceptualisation of the Brass LNG project, oil price was low at almost the same level currently, before price soared.
He said: “Shareholders were concerned because of the price of executing the project and that concern got heightened when of course, there was the collapse of the price in the crude oil market. But the company has taken the initiative which has now led to the one plus one strategy.
“They said that instead of taking Final Investment Decision, FID, on the two trains; take one train and as you start construction, you go for the other. But when you are doing the first one, you still make provision for things you would use in the second one. You don’t need to re-mobilise anyway.”
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