Phillips Signs MOU for LNG Facility Study in Nigeria

Phillips Oil Company (Nigeria) Limited, a wholly owned subsidiary of Phillips Petroleum Company, and its co-venturers, the Nigerian National Petroleum Company and Nigerian Agip Oil Company, along with the Government of the Federal Republic of Nigeria, have signed a Memorandum of Understanding to develop a new liquefied natural gas (LNG) facility in Nigeria.

The Memorandum of Understanding establishes a multi-discipline study team that will perform a conceptual evaluation of an offshore LNG facility. The LNG facility will be nominally sized at 5 million metric tons per year (850 million cubic feet per day of natural gas). It will be located offshore in the Niger Delta near the existing Brass River crude terminal at a water depth adequate for loading LNG tankers. The facility is expected to be onstream by 2007. The gas supply will come from substantial gas reserves within onshore oil and gas fields already operated by an existing joint venture among the companies.

"We are extremely pleased to have the opportunity to participate in this LNG project," said Robert Smith, managing director of Phillips Oil Company (Nigeria) Limited. "This will be a world-class LNG facility and the first to be located offshore. We view our participation in the project as a significant opportunity for Phillips and its co-venturers, and look forward to strengthening our long-term relationship with the Federal Republic of Nigeria."

The companies currently are co-venturers in oil and gas exploration and production on the Niger Delta. Phillips holds a 20 percent interest in the joint venture, while the Nigerian National Petroleum Company holds 60 percent and Nigerian Agip Oil Company (operator) holds 20 percent.