Addressing local content in ship procurement

LNG Lagos II

LNG Lagos II

BESIDE infrastructural challenges, dearth of human capital has been identified as one of the greatest constraints facing different segments of Nigeria’s maritime sector.

The Federal Government seems to understand this problem and has always reiterated its commitment to addressing this issue through policies and collaborations with relevant stakeholders.

Such collaborations entail training and creating necessary atmosphere for the transfer of skilled knowledge.

According to experts, regular training and partnership with strategic firms contribute in no small measures to employment generation and economic growth.

Speaking at a Ship naming ceremony in Korea, the Managing Director of Nigeria Liquefied Natural Gas (NLNG) Limited, Babs Omotowa, restated the company’s resolved to provide training support for young Nigerians and also give local firms the opportunity to participate in Ship design and construction in line with local content requirements.

The Bonny Gas Transport (BGT), a subsidiary of NLNG had in 2013 placed order for six new Dual Fuel Diesel Electric  (DFDE) LNG Vessels. Constructed by Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI), the new Vessels are expected in Nigeria between December 9, 2015 and end of the year.

Established in 1989, BGT commenced operations with four LNG Carriers and currently owns 13 LNG Carriers, six of which will be retired by the end of this year.

Under the arrangement, which is defined in a Memorandum of Agreement between NLNG/BGT and the shipyards (Hyundai Heavy Industries and Samsung Heavy Industries) includes major initiatives such as the training and development of Nigerians (both in Nigeria and Korea) in various aspects of ship design and construction, the supply of materials such as paints, cables, anodes and furniture by Nigerian suppliers for the construction of the vessels.

Omotowa described regular training as a key component of the company’s vision, noting, “For the first time, some Nigerian companies have participated in the construction of our vessels here in Ulsan, Korea”.

According to Omotowa, the companies involved are Nexans KabelMetal, Berger Paints, Paints and Coating Manufacturing Nigeria and Metec West Africa, “Supplying cables, paints and anodes valued at over $10million”.

In similar vein, he disclosed that over 100 young Nigerian technicians have benefited from NLNG partnership in developing local skills in ship design and construction.

Omotowa said after the training, about 64 of them were given the opportunity to be part of the construction of the new vessels built by Hyundai Heavy Industries (HHi), adding, “We can only describe this partnership as one of excellence”.

Speaking in a similar vein, the Group Managing Director (GMD) of NNPC, now Minister of State (Petroleum), Dr Emmanuel Ibe Kachukwu, commended the Board and Management of BGT and NLNG for the successful acquisition..   Represented by NNPC Group Executive Director (Exploration and Production), Dr M Kacalla Baru, Kachukwu said BGT and its shareholders went through and transparent acquisition process, adding that the process was made “even more palatable by the participation of K-Sure and K-EXIM in the Vessel Acquisition Programme.

Kachukwu said: “NNPC in particular, appreciate the strong efforts made by the yard to not only train many Nigerian workers in Korea and in Nigeria but also the efforts made towards satisfying the local procurement commitment made under the Ship Building contract.”

He said the NNPC would continue to support BGT and NLNG in expanding their business both as shareholder and as Industry leader in Nigeria.

Going down memory lane, NLNG General Manager (Shipping), Capt. Temi Okesanjo, commended all those who contributed in one way or the other to the success of the initiative.

NLNG explained that two of the carriers from HHI are enhanced with a capacity of   177,000 Cubic Metres, a length of 299 metres and a breath of 46 metres, while four others put together by SHI boast of 174,900M.
According to NLNG, the new Vessels demonstrate the company’s determination to successfully “ride out the turbulence currently affecting the energy industry and remain a trusted partner and contributor to global energy security”.

Speaking during the ship naming ceremony at Hyundai Heavy Industries Shipyard in Ulsan, Korea, Omotowa described the ceremony as a symbol of enthusiasm with which Nigeria as a nation is reinforcing and consolidating its position “not just as Africa’s largest economy today but also preparing for a future of security, greatness and economic prosperity”.

Omotowa said: “This August ceremony also prepares us for the future with plans for expansion of operation. NLNG is currently planning for an additional train that will increase its production capacity from 22 to 30 metric tones per annum. Our shipping capacity must also grow to meet the demands of this expansion”.

The NLNG boss also used the opportunity to explain its local content vision as well as support from HHI, noting, “For the first time, some Nigerian companies have participated in the construction of our vessels here in Ulsan”.

According to Omotowa, the companies involved are Nexans KabelMetal, Berger Paints, Paints and Coating Manufacturing Nigeria and Metec West Africa, “Supplying cables, paints and anodes valued at over $10million”.

In similar vein, he disclosed that over 100 young Nigerian technicians have benefited from NLNG partnership in developing local skills in ship design and construction.

Explaining further, Omotowa said after the training about 64 of them were given the opportunity to be part of the construction of the new vessels built by HHi, adding “We can only describe this partnership as one of excellence”.

The four Vessels are subsequently christened LNG Lagos 11, with wife of the Lagos State Governor, Bolanle Ambode as ‘godmother’, and LNG Bonny 11 with the wife of King Edward Asimini William Dappa-Pepple, the Natural Ruler of Grand Bonny Kingdom, and Paula Tamunoipiriye as ‘godmother’.

The two vessels from SHI, named LNG FINIMA 11 has the wife of the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Mrs Elizabeth Ibe Kachukwu as “godmother’ while the wife of the River State Governor, Mrs Suzzette Nyesom-Wike is ‘godmother’ to LNG Port Harcourt 11.

Three of the ‘godmothers’ were present at the ceremony while NLNG General council/ Company secretary, Edith Unuigbe, represented Mrs Elizabeth Ibe Kachukwu.

Omotowa said: “There is no question as to the history being made here today. This is not the first we would do this with Hyundai Heavy Industries. We have worked as partners in the past to build seven vessels and it is not by chance that we associate with the best in ship construction.

“LNG Rivers and LNG Sokoto were named here in 2002. LNG Bayelsa followed in 2003. Then came along LNG Akwa Ibom. LNG Adamawa and LNG River Niger in 2003 and 2004. These ships are hallmarks of our shipping capacity and have delivered huge value to making our companies very successful. They have blazed sea routes with our products, leaving a trail of excellence behind in each port and terminal.

“We want to continue as trailblazer and for this reason we came back. HHI remains the world’s largest shipbuilder with a strong track record in the construction of LNG and other marine vessels.

“Our relationship has been mutually beneficial and we are delighted to note the story of collaboration between HHI and Nigeria LNG and BGT continues to one of confidence, top class performance and access. And it is no surprise that we are together after more than a decade and half”.

The Charge d’ Affairs at Nigeria Embassy in Korea, Momoh Sheidu Omeiza said the present acquisition of newer and modern LNG Ships further widens the company’s aspiration “for which the management deserve praise and I am very sure that BTG will gather more prases from well-meaning Nigerians for this wonderful stride that will further enhance Nigeria’s participation in a competitive international Gas market”.

He expressed appreciation for the HHI’s endless hours at watching out for details and ensuring quality control during the ships building process.

He said: “Korean products speaks for its quality and integrity and I believe that BGT sooner than later will be encouraged by that to place for more ships. The satisfactory execution of the present contract agreement should be the beginning of a mutually assuring relationship.”



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