Eddy Van Den Broeke's US$350 million LNG Bet
|Feyi Fawehinmi||Feb 6, 2018|
Greenville is a unicorn of Nigerian infrastructure investment, representing hundreds of millions of dollars in investment in mid-stream gas supply by a completely new market entrant, that is not an IOC, which indeed has scant experience in the oil and gas industry. Most peculiarly, until the signing of an agreement with Total of Nigeria last week, the company had neither firm feed stock or off-take agreements.
Greenville, is the brainchild of a Belgian sponsor, Mr. Eddy Van Den Broeke, who is spending US$350 million of his own money to see it come to fruition.
All of this is equity which is a remarkably bold move necessitated by the aforementioned lack of credible offtake agreements. He raised the money by selling a logistics and bitumen operation (the largest in Nigeria) he owned in Nigeria for a reported US$700 million around the start of the decade. He is now funding the construction of Nigeria’s first on-shore, domestically oriented LNG facility.
Importantly, the plant is to be situated close to several gas lines and assets just outside Port Harcourt in the Rumoji area of Rivers State. There is substantial merchant demand waiting to off-take when it comes online. It is also accessible by road and Mr Van Den Broeke knows logistics if nothing else.
Greenville used a GE LNG ‘modular’ plug and play plant in the environs of Port Harcourt. The assets have been there for some time, and construction has had some stops and starts as the technology has been less modular, containerised and plug-and-play than advertised. Nevertheless, the company signed a legacy purchase MOU for the LNG with Kaduna state and the Federal Ministry of Power in 2010.
Greenville marketing team claim that they will be able to bring “LNG at a price that will even be competitive with the piped gas price.” This is a strange and interesting claim but perhaps what they mean is that their LNG would be cheaper than what a pipeline to Kano would have to charge. But no such pipeline exists.
Greenville had a draft Gas Supply Purchase Agreement (GSPA) with Nigeria Gas Company (NGC) but NGC's lack of actual gas volumes rendered the GSPA effectively worthless. They have thus been forced to ask Total for gas to fulfill their contract with Kaduna State and the Ministry of Power. This gas has been provisionally secured from Total almost entirely due to the personal intervention from the Minister of State for Petroleum, Ibe Kachikwu and his Senior Adviser on Gas, 'Gbite Adeniji, pointing to the risk of such projects without political intervention.
All told, the plan is for 2 trains of 750 metric tons of LNG per day which translates to 60 mmscf of gas each per day - a moderately large amount for on-shore associated gas. The first train of 3 modules of 250 MT per day of gas should be able to provide almost continual supplies of gas for about 180 MW of industrial or commercial gas fired power generation in Nigeria.
A small step towards Nigeria’s journey out of energy poverty.