FG saves $2bn on LNG Train 7, boosts local content

 

 

Chinazor Megbolu   |  

 

The Federal Government has said it boosted local content by saving $2 billion on  Engineering Procurement and Construction (EPC) contract for Nigeria LNG Train 7 project. 

 

The Nigeria Content Development and Monitoring Board (NCDMB) disclosed this on Saturday, noting the $2 billion savings was through the Nigerian Oil and Gas Industry Content Development (NOGICD) Act implementation.

 

The Executive Secretary, NCDMB, Mr. Simbi Wabote, during a workshop held for the judiciary via zoom, hinted that the ample evidence had proven that sustainable local content practice decreased the cost of oil and gas projects as well as creating employment opportunities and economic prosperity.

 

He noted that with the LNG Train 7 EPC bid, where Saipem Contracting Nigeria and its consortium, won the contract with lower bid, leveraging on 50 years commitment to local content and investments in Nigeria.

 

According to him; ”in the concluded LNG Train 7 project contract awarded, the difference in price between Saipem that had established itself in Nigeria and the second lowest bidder coming from outside the country was $2 billion.

 

“That’s a huge sum of money that this country would have lost if not for the drive for the development of local content.

 

“The other consortium had no footprint in the country and it proposed to put extra $2 billion on the back of the project to develop local capacity to execute the project.

 

“This is evidence of cost savings associated with the development of local content”.

Wabote further explained that boosting local content and capacity building would always entail some costs at the beginning.

 

He also added that such costs eventually get reduced overtime and creates employment opportunities and stable polity.

 

Wabote buttressed that the focus of Nigerian Content implementation was not Nigerianisation, but a means of encouraging domiciliation of capacities and promotion of foreign direct investments and home grown investments.

 

He maintained the NOGICD Act would always protect investments in Nigeria, stressing that organisations that built capacities were given first right of refusal in industry projects.

 

“The law is a protective instrument for businesses. There are cable manufacturers in Lagos.

 

“If there is any opportunity to supply cables to oil and gas companies in Nigeria, those companies have the right of first refusal,” Wabote said.

 

Meanwhile the Chief Justice of Nigeria, Justice Tanko Muhammad while thanking NCDMB for enhancing the judiciary capacity to dispense justice from an informed and contemporary position, said the implementation of local content policies across the world is a means through which the citizenry of oil rich nations derive value from crude oil resources.