Nigeria Gas Project On Stream Three Months Early

Production has started at the third module of Nigeria LNG's Bonny Island Gas Complex - a Shell joint venture that is the largest industrial project ever undertaken in Africa.

The first gas from the new module, known as a train, will be transported to Spain in a major milestone for NLNG which began production in 1999 and plans to build a further two trains by 2005. The new train was completed on budget and three months ahead of schedule. It brings NLNG's total production capacity to nine million tonnes of LNG and 1.25 million tonnes of LPG a year.

Shell, a 25.6 percent shareholder in NLNG, expects the third train to play an important role in meeting its commitment to stop flaring the gas associated with oil production in Nigeria by 2008.

While trains one and two convert gas mainly from dedicated gas wells into liquefied natural gas (LNG), the new plant has the capacity to convert 'associated' gas from oil wells, which would otherwise be flared, into LNG and liquefied petroleum gas (LPG).

Andrew Jamieson, managing director of NLNG, said: "These new facilities will consolidate the company's track record as a reliable supplier to the Atlantic basin market. Nigeria is now well placed to serve the demands of Western Europe, the Mediterranean, South America and United States. This milestone in our company's history underlines our current and potential customers' confidence in NLNG, which has been further underscored by their commitment to major additional volumes from Trains four and five from 2005."

Nigeria's gas reserves are expected to last for 110 years: the country ranks 10th in the world in proven reserves with around 160 trillion cubic feet (4,500 bcm), one third of Africa's total gas stock.

Shell's partners in the NLNG joint venture include the Nigerian National Petroleum Corporation (49%), TotalFinaElf (15%) and Agip (10.4%).