Nigeria banks loan $220 mln to finish Mobil GTL plant
Mon Jun 23, 2008 11:29am EDT
reuters.com
By Camillus Eboh
ABUJA, June 23 (Reuters) - Nigeria's state oil firm NNPC said on Monday it had signed a $220 million financing deal with a group of Nigerian banks to help complete a natural gas to liquid joint venture with the local arm of Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz).
Nigeria has said it hopes that the NGL II gas-to-liquid project -- 51 percent owned by Exxon subsidiary Mobil Producing Nigeria (MPN) and 49 percent held by NNPC -- will help reduce its dependence on imported fuel.
The Nigerian banks would contribute the $220 million loan, repayable after 25 years, to finance the final segment of the project, which was first started in 2004 and is expected to produce 40,000 barrels per day, NNPC said in a statement.
It said the deal was signed in London at the weekend.
"The project financing plan is in line with government aspiration to end gas flaring and monetise gas," NNPC executive director for exploration and production, Chris Ogiewonyi, said.
Despite being the world's eighth-biggest oil exporter, Nigeria's four state-owned refineries have frequent production problems, largely due to mismanagement and vandalism, saddling the country with an annual fuel import bill of some $4 billion.
NNPC signed a $1.275 billion financing deal in 2004 for the construction of extraction platforms, pipelines and onshore facilities to boost the estimated production lifetime of existing operations at the joint venture.
At the time, officials said construction work would likely be completed in 2007, with a startup date of 2008.
Exxon Mobil has said the project is still in the planning stages and has given no details of a timeframe.
NNPC said the U.S. government's Overseas Private Investment Corporation and investment bank Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz) First Boston had contributed $575 million to the project back in 2004.
But it said the latest deal was a "landmark achievement" because it was the first project financing to be fully sponsored by Nigerian banks. (Writing by Nick Tattersall; editing by James Jukwey)
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