LAGOS, April 18 The first phase of Nigeria's Olokola Liquefied Natural Gas (OK-LNG) will be ready by 2012, the state news agency cited President Olusegun Obasanjo as saying, later than previously thought.
The Olokola LNG and related pipeline projects will cost an estimated $9.8 billion, with Nigeria investing part of its oil windfall savings to take up its 49.5 percent stake.
"As natural gas demand continues to grow in the global market place, we must act with speed so as not to lose ground to other exporters," Obasanjo said at a ceremony to flag off the construction of the OK-LNG plant on Tuesday, the agency said.
It will produce 22 million tonnes per annum of LNG with completion of the first stage of the project targeted for 2012, Obasanjo said. Authorities had previously estimated start-up in 2011.
The four-train OK-LNG is being built on the border of the southwestern states of Ogun and Ondo through a joint venture by the Nigerian state with Royal Dutch Shell (RDSa.L) with 18.5 percent, U.S. energy giant Chevron (CVX.N) with 18.5 percent and the UK's BG Group (BG.L) with 13.5 percent.
The plant will produce an initial 10 million tonnes of LNG and 2.5 million tonnes of liquefied petroleum gas per annum as well as a substantial quanties of condensates.
LNG is gas which has been cooled and compressed into liquid form for easy transportation by tanker.
Africa's top oil producer is one of the world's major LNG exporters. Its first plant, the Nigerian Liquefied Natural Gas is expected to raise output to 22 million tonnes per year when its sixth train starts up later this year.
The fifth train of the plant, located on Bonny Island in the southern delta state of Rivers, came on stream in 2006.
Obasanjo said Nigeria should be earning $10 billion annually from liquefied gas exports by 2011 when the first cargo from its second LNG plant is due for export to the United States.
The Brass LNG is a joint venture between the NNPC with 49 percent, and Italian oil firm Eni ENI.M, French energy giant Total (TOTF.PA) and ConocoPhillips (COP.N). The partners agreed last year to offer pro rata stakes to BG and Centrica (CNA.L).
The plant, which will be built near the Brass oil export terminal on the eastern Nigerian coast, will produce 10 million tonnes of LNG a year at full capacity.
"In essence, by 2012/2013, we should have major LNG export terminals at three key points along the Nigerian coast, spread from the East to West," Obasanjo said. "This should usher in a major wave of economic development in these axes."