The Nigeria LNG and the Nigerian Content Development and Monitoring Board (NCDMB) met to compare notes and elaborate details on the local content component of the US$7.6bn Train 7 project signed in May 2020
The Train 7 project is expected to create more than 12,000 direct jobs at the peak of construction.
All contracts for engineering, procurement and construction works in relation to NLNG Train 7 have been awarded to a consortium comprising Saipem, Chiyoda and Daewoo (‘SCD JV’), which will manage any subcontracting, and administer the vendor’s lists as approved by the Nigerian Content Development Monitoring Board (NCDMB).
The NNLG has stated that it is working closely with NCDMB, and is committed to giving Nigerian indigenous service providers and goods manufacturers’ first consideration without compromising business ethics, HSE and quality at a competitive price. It also said the project will also support the development of local engineering and fabrication capacity in the country.
Total in-country engineering man hours are set at 55 per cent, while Nigerian vendors will make 55 per cent of all procurement for project execution.
In addition, 100 per cent of all installations and construction will happen in Nigeria. More than 70,000 tonnes of manufacturing materials will be produced in-country covering condensate stabilisation units, tanks, pipe racks, flare system, non-cryogenic vessels, and many other pipe spools and fittings.
NNLG stated that other opportunities for local content include procurement, logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, and many more.
In line with the vision of being a global LNG company that helps build a better Nigeria, NNLG stated, “Train 7 will help create opportunities for local businesses to build capacity in building and maintaining LNG plants.”
Tony Attah, NNLG’s managing director, said local content is one of Train 7’s major value drivers as it will create jobs, increase skills and capacity, unlock opportunities in the oil and gas industry and hopefully open the door to further expansion activities with the possibility of additional LNG trains and projects.
He assured NLNG will work with the contractors and the board to deliver the agreed Nigerian content on schedule, within the budget, in line with the highest standards of ethics and compliance, and a strong focus on HSE.
He described the Train 7 contract award and execution as a clear demonstration of the commitment of NLNG and its shareholders to continued investment in the Nigerian oil and gas sector with the attendant creation of capacity, competency and value.
He explained that due to the effect of COVID -19, there will be a limited engineering activities for the first 12 months, although the engineering office will open in August 2020, the bulk of fabrication and manufacturing activities will be suspended until the pandemic is under control.
“The parties have agreed on mechanisms that will facilitate a ramp up and pivot into the full scope of work as soon as clearly defined indices are achieved at which point the more traditional expectations of the project execute phase will come into play with full mobilisation of the contractor to site.”
Simbi Wabote, engineer and executive secretary of NCMCB, charged the lead contractors, Saipem, Chiyoda and Daewoo (SCD), the joint venture and subcontractors to push the boundaries- “We need a can do spirit with respect to jobs creation, trainings for new skills, in-country capacity utilisation, addition of new capabilities, research and development and uncommon innovation into territories uncharted.”
In his comments Walter Peviani, the managing director of Saipem, explained that a clear path for the bidders with regard to Nigerian Content requirements to enable a well-structured bids had been created.
He said the implementation models adopted by the NCDMB were highly effective, suggesting they would result in lower project execution costs and project plan compliance.