(Recasts with president breaking ground on LNG plant) By Estelle Shirbon ABUJA, May 14 (Reuters) - Outgoing President Olusegun Obasanjo flew to Nigeria's anarchic oil region on Monday to perform a ground-breaking ceremony on a planned $8 billion gas plant that is not certain to be built. The Brass Liquefied Natural Gas (LNG) plant would be located in an area of the Niger Delta where an oil export terminal and pipelines have been bombed, oil output cut by attacks, foreign workers kidnapped and villagers killed in communal conflict. Obasanjo's trip to Brass, announced by his spokeswoman on Monday, comes as violence is surging. Thirteen foreign workers are being held hostage, and on Monday morning a Nigerian manager with Italian oil firm Agip was snatched in the lawless city of Port Harcourt. The partners in Brass LNG -- Italy's Eni <ENI.MI>, France's Total <TOTF.PA>, ConocoPhillips <COP.N> of the United States and Nigeria's state firm -- have yet to make a final investment decision on the project. Industry sources say contractors have not visited the site for months because of safety fears while shareholders are awaiting an improvement in security before going any further. Analysts said Obasanjo, who is due to step down in two weeks, probably wanted to send out a message that Brass LNG would definitely be built despite spiralling violence in the delta that has cut Nigeria's oil output by a quarter. But they questioned whether it was appropriate for him to formally launch such an expensive project when investors had yet to start work and he was about to hand over to his successor, president-elect Umaru Yar'Adua, on May 29. "ALICE IN WONDERLAND" "Obasanjo's mandate is running out and it seems that the government of the day is in a very big hurry to complete deals that have been years in the pipeline," said Antony Goldman, an independent risk analyst based in London. "But there are still issues outstanding that would perhaps best be resolved by the new government," he said. "It's the second time in a month that Obasanjo breaks ground on a huge LNG project when contractually there is no guarantee these projects will go ahead. There's a surreal, Alice in Wonderland quality to what's going on." Goldman was referring to OK LNG, a project worth $10 billion that has also not reached final investment decision and which Obasanjo flagged off on April 17. OK LNG would straddle two states including Obasanjo's home state of Ogun. Nigeria is the world's eighth-biggest exporter of crude oil but it also has the world's seventh largest gas reserves and it is looking to grow its gas exports. Brass and OK are long-term investments and the government has been working on the assumption that the violence in the delta is a temporary problem -- but that stance is undermined by almost daily news of abductions and bombings. On Monday, six gunmen dressed in military uniforms snatched the Nigerian manager from Agip on his way to work, a source working for a security company said. About 100 expatriates have been kidnapped this year but most have been released after their employers paid ransoms. U.S. major Chevron <CVX.N> said on Friday it was evacuating hundreds of non-essential staff from offshore operations due to security concerns. It said the pullout would not further impact its production in Nigeria, which has been cut by attacks.
