Nigeria LNG (NLNG) said Wednesday it has a letter of intent (LOI) with the SCD consortium for a seventh train at the Bonny liquified natural gas (LNG) plant in the Niger Delta. The consortium is made up of Saipem SPA, Chiyoda Corp. and Daewoo E&C.

NLNG CEO Tony Attah said signing the LOI was a “bold and very clear statement that the company is forging ahead with Train 7,” which is set to raise capacity from 22 million metric tons/year (mmty) to 30 mmty.

“With the signing of the LOI, we hope that by the end of October a final investment decision (FID) will be signed for Train 7. This will ensure we attain our ambition of increasing our production by 35%,” he said.

Italy-based Saipem said the LOI is conditional upon regulatory’ approvals and the pending FID. Saipem holds about a 60% share in the consortium. State-owned Nigerian National Petroleum Corp. holds a 49% interest in NLNG. Other project partners include Royal Dutch Shell plc, with a 25.6% stake, Total SA, with a 15% interest, and Italy’s Eni SpA, with a 10.4% stake.

With a seventh train, Nigeria is expected to become the fourth biggest LNG exporter in the world. Total’s management sees LNG as a key project for Nigeria’s development, NLNG said.

NLNG said it was keen to not fall behind gains made by Australia and the United States in global LNG markets. “Keeping up will require a huge investment,” management said. “Train 7 will cost as much as $6.5 billion to build, with another $5 billion to be spent on wells and pipelines needed to supply the plant. NLNG is seeking $7 billion from the global financial markets for sustainability of its operations and the expansion.”

In 2018, Nigeria exported 19.68 mmty of LNG, representing a 6.3% share of global output, behind Qatar’s 76.79 mmty, Australia’s 66.66 mmty, Malaysia’s 24.66 mmty and the United States with 20.65 mmty, according to the International Group of Liquified Natural Gas Exporters.

If the new train is sanctioned this year, it could become operational by 2023, around the time that global supplies are expected to surge and push prices for the fuel lower.

In Shell’s global LNG Outlook issued in February, it said there was potential for a supply shortage developing in the mid-2020s without more project commitments. Spot LNG prices in Asia recently dipped below the $4.00/MMBtu price point, hitting multi-year lows from new supply entering the market from both Australia and the United States as well as warmer temperatures and ample inventory in Japan, China and South Korea, the world’s top three gas importers.

Lower spot prices are putting pressure on existing long term off-take agreements as more buyers seek to renegotiate these contracts. Wood Mackenzie recently said as many as 15-25% of current long-term Asian supply deals could be under review.