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By: BankTrack
Created on: 2021-11-09 14:51:32
Last update: 2022-08-12 11:22:02

Contact:

climate@banktrack.org


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Nigeria LNG at night. Photo: Chike Roland ORAEKWUGHA via Flickr (CC BY 2.0)
Sector LNG Terminal
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website https://www.nigerialng.com

About Nigeria LNG

Nigeria LNG Limited (NLNG) is a liquified natural gas (LNG) terminal, located on 2.27 square kilometres of largely reclaimed land in Finima, on the Niger Delta’s Bonny Island. In operation since 1999, the facility consists of six trains (processing units) that together are able to produce 22 million tonnes per annum (mtpa) of LNG, which is approximately 6% of global LNG trade. The project is a joint venture between Nigerian National Petroleum Corporation (NNPC), Shell Gas B.V., TotalEnergies and ENI International. The construction of Train 7 started in June 2021 and will increase the total production capacity to 30mtpa.

Latest developments

EU explores additional Nigerian gas imports to replace Russian supplies

2022-07-23 00:00:00

Contracts awarded for Nigerian Train 7 LNG project

2020-05-13 00:00:00

Why this profile?

For more than 20 years, this project has proven to be harmful to local communities. Its expansion would further threaten livelihoods and the local environment, increasing pollution and damaging important ecosystems.

What must happen

People who are still waiting for resettlement compensation must be paid. The project’s expansion should be cancelled to avoid further pollution, deforestation and local economic damage. SMBC Group and Guaranty Trust Bank of Nigeria should resign as Nigeria LNG’s finance advisors, while all involved banks should refuse to finance the expansion.

Impacts

Impact on human rights and communities

Displacement and the loss of livelihoods awaited the communities of Bonny Island when Nigeria LNG arrived. Starting in 1991, locals were relocated from ‘Old Finima Community’ to ‘New Finima Community’ to make way for construction. New Finima is a reclaimed mangrove area that was not suitable for the traditional occupations of those who moved there – such as fishing, hunting, farming, carving and weaving – and many lost their main income source. Many faced intimidation during the relocation process, for which a military task force was often used. Among this displaced population are Indigenous communities, dealing with the trauma of being forced from ancestral lands.

Unfulfilled promises of compensation and lease agreements have been made by Nigeria LNG, while the Nigerian government has also not delivered on due compensation: The 1978 Land Use Act allows the state to acquire land in matters of overriding public interest, but compensation must be paid. As recently as January 2022, communities are still claiming they have not received compensation.

Social inequality has increased on Bonny Island since Nigeria LNG arrived, according to reports by Africa-based civil society organisations. Except for some menial jobs, most Nigeria LNG plant workers came from other regions. In Nigeria LNG’s own Environmental, Social and Health Impact Assessment (ESHIA) for Train 7, the company acknowledges that local employment and skill acquisition opportunities will mostly be temporary: “after the construction works, thousands will depart and the area will be left with environmental and human impacts from increased urbanisation and rural land abandonment”.

Long-term social unrest includes protests as recently as June 2021, when Finima community members temporarily closed down the facility to reassert themselves as the rightful hosts of the land Nigeria LNG occupies. In 1999, the facility’s first shipment was delayed after protestors attacked the plant. Since then, wider unrest has been stoked by the increasingly uneven distribution of gas-generated wealth in the Niger Delta. The authorities’ increasingly militarised and violent responses to these sentiments and actions are not easing an already tense situation.

Pollution-related health problems in the local community that can be attributed to Nigeria LNG gas flaring include kidney problems, lung damage, cancer and neurological and reproductive problems among pregnant women and infants. The average life expectancy of the area has decreased with the arrival of the fossil fuel industry.

Women and girls have suffered disproportionately due to a number of factors, predominantly rooted in the local poverty caused by the project: decreasing household income can force young girls out of school, which increases rates of teen pregnancies, prostitution and STD transmission rates.

Impact on climate

Climate change is being felt more keenly in Africa than in other parts of the world. Prolonged droughts, floods and other harmful weather events are affecting the livelihood of millions of people across the continent. Support for and expansion of fossil fuel extraction poses the risk of significant debt and does not align with Paris Agreement goals. Train 7’s ESHIA claims the project will improve NLNG’s energy efficiency, but its overall greenhouse gas emissions will still increase. When NLNG’s removal of around 31 hectares of local carbon sinks such as forest and swamp is also taken into account, it is clear that Nigeria LNG is exacerbating climate change.

Impact on nature and environment

The loss of natural areas and their associated biodiversity has occurred during Nigeria LNG’s land reclamation. For example, marine species have lost breeding grounds. The Niger Delta is the world’s second-largest wetland, of which 2.27 square kilometres – mostly swamp and low-lying rainforest – have been given over to NLNG’s plant.

This already dire environmental situation will worsen with the construction of Train 7. More swamp and forest land must be cleared to build its workers’ village, in a region where the rate of deforestation is already high. The installation of canals and increased shipping activities will then cause an influx of seawater, further threatening the forest.

An LNG-linked reduction in Bonny Island’s air quality is set to be aggravated by NLNG’s Train 7 project expansion.

Other impacts

Corruption scandals have been unearthed by journalists investigating Nigeria LNG. In February 2022, it was reported that LNG was being illegally exported to North and South American countries. This was made possible for more than 20 years through international cartels, led by several highly influential individuals with the support of NLNG. From 2009 to 2013, more than USD 1 billion worth of hydrocarbon products were exported to countries such as Argentina, Brazil, Mexico and the United States. Nigeria LNG denied the claims, demanding a retraction.

Governance

Bank policies

The following bank investment policies apply to this project:
Sumitomo Mitsui Banking Corporation (SMBC)
csr policies
2021-01-14 00:00:00

Management of environmental risks

Date listed represents date as accessed on website
2021-01-14 00:00:00 | Sumitomo Mitsui Financial Group
BNP Paribas
csr policies
2017-10-17 00:00:00

Commitments to the environment

2017-10-17 00:00:00 | BNP Paribas
Société Générale
csr policies
2014-09-01 00:00:00

Environmental and social general guidelines for business engagement

2014-09-01 00:00:00 | Société Générale
csr policies
2020-10-28 00:00:00

Climate strategy

2020-10-28 00:00:00 | Société Générale
Deutsche Bank
csr policies
2016-03-24 00:00:00

Human Rights Statement

2016-03-24 00:00:00 | Deutsche Bank
csr policies
2020-08-12 00:00:00

Climate statement

2020-08-12 00:00:00 | Deutsche Bank
Bank of China
csr policies
2018-05-03 00:00:00

Corporate Social Responsibility Policy

2018-05-03 00:00:00 | Bank of China Hong Kong
csr policies
2019-04-01 00:00:00

Environmental policy

2019-04-01 00:00:00 | Bank of China Hong Kong
Banco Santander
csr policies
2020-07-20 00:00:00

Human rights policy

2020-07-20 00:00:00 | Banco Santander
csr policies
2021-03-04 00:00:00

Environmental, social and climate risk policy

2021-03-04 00:00:00 | Banco Santander
Absa Group
csr policies
2020-04-16 00:00:00

Sustainability policy

2020-04-16 00:00:00 | Absa Group
Access Bank
csr policies
2020-09-16 00:00:00

Environmental and social risk management

(page 18 of Risk Management document)
2020-09-16 00:00:00 | Access Bank
DZ Bank
csr policies
2021-03-15 00:00:00

Sustainable lending policy

2021-03-15 00:00:00 | DZ Bank
csr policies
2022-01-24 00:00:00

Climate strategy

Date listed represents date as accessed on website
2022-01-24 00:00:00 | DZ Bank
csr policies
2022-01-24 00:00:00

Human rights policy

Date listed represents date as accessed on website
2022-01-24 00:00:00 | DZ Bank
KfW
csr policies
2012-10-02 00:00:00

Sustainability guidelines of KfW Bankengruppe

2012-10-02 00:00:00 | KwF Bankengruppe
csr policies
2014-04-01 00:00:00

Sustainability Guideline

Evaluation of Environmental, Social, and Climate Aspects: Principles and Process
2014-04-01 00:00:00 | KfW Development Bank
Citi
csr policies
2017-12-31 00:00:00

Energy & Power Sector Framework

2017-12-31 00:00:00 | Citi
csr policies
2018-11-22 00:00:00

Statement on human rights

2018-11-22 00:00:00 | Citi

Applicable norms and standards

Equator Principles
IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
IFC Performance Standard 3: Resource Efficiency and Pollution Prevention
IFC Performance Standard 4: Community Health, Safety, and Security
IFC Performance Standard 5: Land Acquisition and Involuntary Resettlement
IFC Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

Other applicable regulations

Land Use Act of 1978, Nigeria

Timeline

EU explores additional Nigerian gas imports to replace Russian supplies

2022-07-23 00:00:00

In anticipation of Russian supply cuts, the European Union is looking to increase Nigerian LNG imports, which currently account for 14% of the bloc’s supply. NLNG is operating at 60% capacity due to pipe vandalism and must reach 80% capacity to satisfy the extra demand.

Contracts awarded for Nigerian Train 7 LNG project

2020-05-13 00:00:00

Nigeria LNG has announced that the Engineering, Procurement and Construction contracts for its Train 7 expansion project have been awarded to the SCD JV consortium, comprising affiliates of Saipem, Chiyoda and Daewoo.

Nigeria LNG signs Train 7 FID

2019-12-27 00:00:00

NNPC, Shell Gas B.V., TotalEnergies and ENI International have agreed upon the Final Investment Decision for Nigeria LNG’s Train 7 expansion. It is projected to increase the facility's LNG annual output by 35%, to 30 million tonnes. Guaranty Trust Bank of Nigeria and Sumitomo Mitsui Banking Corp (SMBC) were appointed Train 7’s financial advisers earlier this year.

NLNG releases ESHIA for Train 7 expansion

2019-08-05 00:00:00

Nigeria LNG has published the Environmental, Social and Health Impact Assessment (ESHIA) report for its Train 7 expansion project. NLNG’s CEO Tony Attah: “At several instances, we consulted our most important stakeholders – our direct neighbours on Bonny Island – about the intricacies of the plans, the impacts and mitigations, and about their concerns and expectations.”

Operations commence from Nigeria LNG’s Train 6 expansion

2007-12-03 00:00:00

The Nigeria LNG plant’s latest expansion, Train 6, has joined production. Construction of the plant began in February 1996 and a steady expansion campaign has followed, with Trains 1-5 coming online between 12th August 1999 and February 2006.

Financiers

Nigeria LNG’s Train 7 expansion project reached financial close in May 2020, for a total of USD 2.77 billion. This amount is supported by three export credit agencies: SACE (Italy), K-SURE and KEXIM (both South Korea). Each offered guarantees on the Train 7 loans that were provided by the commercial banks listed below.

Related companies

Nigeria LNG is an Incorporated Joint Venture owned by the Nigerian National Petroleum Corporation (NNPC; 49%), Shell Gas B.V. (25.6%), TotalEnergies Gaz & Electricité​ Holdings (15%) and ENI International N.A. N.V. S.àr.l (10.4%).

ENI Italy show profile

Oil and Gas Extraction
Eni is a co-owner and also co-owns 10.4% of the shares in Nigeria LNG Limited.

Nigerian National Petroleum Corporation (NNPC) Nigeria

The NNPC owns 49% of Nigeria LNG. Formerly a government-run enterprise, the NNPC has operated as a state-owned, limited liability company with no government funding since July 2022.

Shell United Kingdom show profile

Oil and Gas Extraction | LNG Terminal | Pipeline Transportation of Crude Oil | Pipeline Transportation of Natural Gas
Shell Gas B.V is a co-owner and holds the largest equity share of LNG capacity among international oil companies (25.6%).

TotalEnergies France show profile

Oil and Gas Extraction | Gas Electric Power Generation | Pipeline Transportation of Crude Oil | Pipeline Transportation of Natural Gas
Total is a co-owner and one of the largest oil and gas producers in Nigeria through its involvement in more than 50 permits, including nine as operator. Total Gaz Electricite Holdings France owns 15% of the shares in Nigeria LNG Limited.

News

| |
Type:
Year:
blog
external news
our news

Standard Chartered & COP27 in Egypt: Locking Africa out of a Just Transition

2022-11-09 | Natasha Ion – BankTrack
blog
external news
our news

Nigeria LNG still producing, exporting despite force majeure

2022-10-20 | Reuters
blog
external news
our news

Nigeria LNG declares force majeure

2022-10-17 | Argus Media
blog
external news
our news

Nigeria, EU to consider 'all options' for increased LNG deliveries

2022-02-15
blog
external news
our news

EXCLUSIVE: How Top Officials In Nigerian Corporations, NLNG, NNPC Operate International Cartels, Illegally Ship Over $1billion Oil To US, South American Countries

2022-02-14
blog
external news
our news

FG threatens to sanction expatriates over Train 7 gas project

2021-04-16 | Premiun Times
blog
external news
our news

Nigeria Loses Billions of Naira Over Lack of Facilities to Drydock NLNG Vessels

2021-04-13 | Leadership

Documents

Type:
Year:
our publications
2022-03-03 00:00:00

Locked out of a Just Transition: fossil fuel financing in Africa

2022-03-03 00:00:00 | BankTrack, Milieudefensie & partners
company documents
2020-08-01 00:00:00

Environmental, Social And Health Impact Assessment (Eshia) For The Train 7 Project

2020-08-01 00:00:00
ngo documents
2020-11-11 00:00:00

A Just Energy Transition for Africa? Mapping the impacts of ECAs active in the energy sector in Ghana, Nigeria, Togo and Uganda

2020-11-11 00:00:00 | Both ENDS

Media




Links

Nigerian blogger Linda Ikeji: NLNG has failed the people of Finima

https://www.lindaikejisblog.com/2021/1/nlng-has-failed-finima-people-we-challenge-company-to-projects-audit.html

Global Energy Monitor Wiki: Nigeria LNG Terminal

https://www.gem.wiki/Nigeria_LNG_Terminal

Rainforest Action Network: Nigeria LNG case study 2021

https://www.ran.org/the-understory/case-study-compilation-oil-and-gas-projects/
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