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Reuters: Chevron pulls out of $5 bln Nigerian Brass LNG project

Tue Mar 7, 2006 8:32 AM GMT
LAGOS (Reuters) – U.S. energy giant Chevron has pulled out of a $5 billion liquefied natural gas project in Nigeria because the government wants to use its gas for a competing project, oil industry officials said on Monday.
Chevron, ConocoPhillips and ENI each have a 17 percent interest in the $5 billion Brass LNG project, along with state-run Nigeria National Petroleum Corp (NNPC) with 49 percent.
But the California-based company also has an interest in a competing LNG project, the $6 billion Olokola plant, which is being fast-tracked by the government of President Olusegun Obasanjo.
“Chevron have many other projects in Nigeria and the government has told them to supply their gas to another project,” said an oil industry source familiar with Brass LNG.
A Chevron source confirmed the company had pulled out but referred questions to NNPC. An NNPC spokesman declined to comment. Brass LNG officials were also unavailable for comment.
Chevron had planned to bring offshore gas to the Brass project, and the remaining Brass LNG investors are now in talks with other potential shareholders and gas suppliers, including France's Total, the industry source said.
NNPC has fast-tracked the 20 million tonne-per year Olokola project, where Chevron and NNPC have Royal Dutch Shell and BG as partners, and NNPC recently said it expects a final investment decision in the third quarter of this year.
The final decision on 10 million tonne-per-year Brass LNG is not expected until three months later.
Ethnic Ijaw activists from the southern Niger Delta, which is the origin of the country's oil and gas, have threatened to interrupt gas supply to Olokola unless Brass also goes ahead.
Olokola is located on the border of Ondo and Ogun states — where Obasanjo's native Yoruba tribe are dominant — while Brass is in the Ijaw-dominated delta.
Ijaw groups see the location of the Olokola project outside the delta as a challenge to their tribe's dominance of the energy sector in the OPEC member nation. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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