Nigeria's First Major Shipyard Project Receives $1.5 Billion Investment

Nigeria LNG subsidiary Bonny Gas LNG carriers in dry dock at Sobrena Shiprepair (currently Damen Shiprepair Brest). Photo: Damen

By Chijioke Ohuocha

LAGOS, June 19 (Reuters) – Nigeria Liquefied Natural Gas Company (NLNG) is sponsoring the construction of the first major ship yard in Africa’s biggest economy at the cost of $1.5 billion, in its attempt to turn the country into a hub for maritime operations on the continent.

Nigeria is the world’s eighth biggest crude producer and Africa’s top oil exporter but it does not have a drydock for maintaining and repairing large crude vessels, a major drawback for carriers sailing to the country, NLNG spokesman Tony Okonedo told Reuters.

Only South Africa had such a facility on the continent, Okonedo said, meaning that ships travelled a long distance for repairs. Nigeria has two facilities that can only accommodate small vessels, he said.

Okonedo said Samsung Heavy Industries and Hyundai Heavy Industries have both agreed a $30 million commitment towards the construction of the facility, which would be located in Badagry, near Nigeria’s commercial capital of Lagos.

“It could potentially be used to transport the 2.5 million barrel a day crude business in Nigeria,” Okonedo said on the sidelines of a media briefing.

Okonedo said the NLNG organised a roadshow earlier this year to market the dry dock project to investors, which included multinational oil companies in Nigeria, with large exploration and upstream activities.

He said NLNG, which is owned by Nigeria’s state-oil company NNPC, Royal Dutch Shell, French oil company Total and Italy’s Eni was in discussions with a strategic investor for the project.

It appointed France’s BNP Paribas and Guaranty Trust Bank to help raise around $1.6 billion two years ago to build six new LNG carrier ships, expanding its fleet to 30.

The construction of the dry dock, with a size that can accommodate 185 football fields, will take up to 48 months to complete and would commence once all the funding was in place, he said.

The company, which was set up over two decades ago, has a capacity to produce 22 million metric tonnes of liquefied gas a year. It obtains its gas supply from upstream oil companies and liquefies it for export.

It has long-term supply contracts with buyers in Italy, Spain, Turkey, Portugal and France and also sells on the spot market.

Revenues for the first half shed 25 percent, in line with the fall in crude prices, NLNG said. (Reporting by Chijioke Ohuocha; Editing by Toni Reinhold)