Concerned stakeholders have extolled the Nigerian Liquefied Natural Gas (NLNG) Limited over its decision to source about $7 billion from global financial markets for the construction of its Train 7. The project which involves huge financial commitment may be hampered due to cost implications.
Stakeholders expressed optimism about the move by NLNG which they believe will improve foreign exchange liquidity in the local market and create more opportunities for Small Medium Enterprises (SMEs) by boosting Nigeria’s economy. It will also create avenue for local banks by preventing the country’s foreign reserves from threat.
However, reacting to the NLNG multi-billion project, Managing Director of Financial Derivatives Limited, Bismarck Rewane, an Economics expert pointed out that local banks do not have the financial wherewithal for such herculean task to fund a project requiring about $7 billion when the capital base of each Nigerian bank is N25 billion.
At present, no Nigerian bank can meet up with required fund since none has such huge financial base to match project as the NLNG.
Besides, during its Financial Investment Decision (FID) in London, NLNG announced it was seeking about $7 billion for the sustainability of its operations and expansion project, which will increase its production capacity from 22 Million Tonnes Per Annum (MTPA) to 30 MTPA.
This indeed, will be a welcome development for the gas company that has improved liquefied gas production and sales in the country.