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Tag: NLNG

  • Time to prioritise gas in Nigeria, says NLNG chief

    Time to prioritise gas in Nigeria, says NLNG chief

    The Managing Director and Chief Executive Officer of Nigeria Liquefied Natural Gas Limited (NLNG), Tony Attah, has said time has come for the country to use gas as catalyst for industrial and economic transformation and become a great gas producing country.

    Attah stated this when the Minister of Information and Culture, Alhaji Lai Mohammed, paid a courtesy visit to the NLNG’s plant on Bonny Island, Rivers State. He said Nigeria urgently needs to unleash its vast gas potential, which currently is put at 187 trillion cubic feet (tcf) of proven reserves, 600 tcf of unproven reserves. The utilisation of the huge gas reserves will afford the opportunity for growth with NLNG Trains 7 and 8 and an increased supply capacity for one metric tons per annum (mtpa) of cooking gas to the domestic market.

    Attah said: “To promote gas sector investment as a catalyst for economic growth for Nigerian economy, it is necessary that affirmative actions are taken to create opportunities to attract international investments. Gas will continue to be an enabler of economic and industrial development and there is need to strategically reposition Nigeria’s gas sector for sustainable economic and industrial development.

    “In NLNG’s case, there was the Nigeria LNG Limited (NLNG) Fiscal Incentives, Guarantees and Assurances Act (NLNG Act). The assurances and guarantees in the Act allowed investments to flow into the country. It provided investors the confidence that any agreement entered into would be respected and preserved. To amend the Act will not help Nigeria, NLNG and its hopes for expansion. It will erode investors’ confidence that the Act provided in the first place.

    “We need to be creative with incentives that will attract investments and preserve the sanctity of contracts and agreements for all of this to come together in our national interest.”

    Citing the Qatari example,  he said: “Today, oil and gas, and principally LNG is the foundation of Qatar’s economy; and account for more than 70 per cent of total government revenue, and more than 60 per cent of GDP, as well as roughly 85 per cent of export earnings. Qatar has LNG capacity of about 77 million tonnes per annum (MTPA), and generates revenue of about $91 billion per year. In Gas-to-Liquid (GTL) production, Qatar is third in the world with production capacity of about 400kbbl equivalent per day and revenue of about $16billion a year – all from GTL. Gas was the catalyst for transformation of a small emirate to a global economic powerhouse.”

  • Bonny NLNG’s gross revenue hits $90b

    Bonny NLNG’s gross revenue hits $90b

    • NNPC seeks passage of PIB

    Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD) Dr. Maikanti Baru yesterday  said the Bonny NLNG is one of the biggest success stories of the  oil and gas industry since it came on stream in 1995.

    He said the project has generated $90 billion revenue, $30 billion dividends and contributed four per cent to the country’s Gross Domestic Product (GDP) since inception.

    According to him, the focus of the industry was to ensure stable security of investment, personnel and investors and to ensure that all community issues were addressed in order to boost revenue for the government and investors from the industry.

    He urged the National Assembly to pass the Petroleum Industry Bill (PIB) into law to clear the air of uncertainty around the industry, create an enabling environment for the industry to flourish and dissuade the International Oil Companies (IOCs) from exiting the country.

    Baru, made this plea while speaking on the Nigerian Television Authority (NTA) morning talk show, “Good Morning Nigeria’ with the topic: ‘Nigeria Lingering LNG Projects’ in Abuja.

    Baru said the long delay in the passage of the PIB had led to uncertainty in the fiscal terms, while the recent move by the National Assembly to amend the NLNG Act had also dampened the optimism of investors in the industry.

    “The review of the NLNG Act by the National Assembly is causing a challenge for the Federal Government and the IOCs and it is sending wrong signals to the international community about how business is done in the country,” he said.

    The NNPC chief said the NLNG market was growing at a tremendous rate, disclosing that between now and 2030, it is projected that the market would grow by 65 per cent.

    He said the market for LNG was there and that the Federal Government would do everything to take advantage of the opportunity.

    Dr. Baru added that the Federal Government would do everything to ensure the take-off of Train 7 and the Brass LNG in the months ahead after which the Olokola LNG would come on board if the fundamentals were strong.

  • NLNG chief to lawmakers: Don’t tamper with NLNG Act

    NLNG chief to lawmakers: Don’t tamper with NLNG Act

    The Managing Director, Nigeria Liquefied Natural Gas (NLNG), Mr. Tony Attah, has urged the National Assembly to stop the proposed amendment to the LNG Act.

    The amendment seeks to impose a three per cent Niger Delta Development Commission (NDDC) tax on the company. But Attah said the proposal was at variance with the NDDC Act.

    He argued that the amendment will stifling investment and dampen investors’ confidence.

    Attah told reporters that the company planned expansion project- Trains 7 and 8 might be hampered by the proposed amendment.

    He said: “Since 2007 we have been making efforts to build Train 7 and 8. It is very imminent now that it is time for gas and it is time for Nigeria to have Train 7 and 8 but things have to be right. A fiscal element around the LNG Act amendment proposed, we think that is not helpful. We think that will not help Nigeria, it will not help us and Train 7 and 8. We think that has to be stopped.”

    Attah warned that if the amendment was left to go on, it  will erode the guarantees and assurances which had inspired the confidence of foreign investors that their investment has been protected.

    “ In addition, any amendment could result in loss of income of between $53million- $124 million being amount attributable to the Nigerian Government in form of dividends, and related withholding tax,“ hr warned.

    Attah said: “Speak as a Nigerian; this amendment, if done will stiffen investment and dampen investors ‘ confidence without any doubt.”

    He also added that the imposition of the three per cent tax will amount to double taxation since those they buy gas from have already paid the tax to NDDC.

    “The NDDC Act says we don’t qualify. We buy gas just like the power producers, like the fertiliser companies etc. The people from whom we buy gas have already paid the three per cent tax upstream. So for us it is double taxation and it is not real,” he said.

    He queried the rationale behind singling out the company out of all other buyers of gas in the country. “Other organisations such as power companies, fertiliser companies, and petrochemical industries which buy gas as feedstock, same as NLNG are not liable to the NDDC Act and are not being asked to pay this additional three per cent tax.”

    NLNG chief did not exenorate the NDDC in the proposed amendment which he claimed the government agency had earlier came up with the idea which the company outrightly objected and also won the case at the law court when NDDC board took the matter to court.

    He saw the amendment as another attempt by the government agency to reintroduce the tax through back door.

    He warned that should the law makers go ahead, the company will have no choice but to abide, however, he said the consequences might be too grievous for the nation.

    He said the company will continue to engage the lawmakers and other stakeholders to see reason why the amendment should not be allowed to go on as it will not be helpful to the country.

    “But I must emphasis that we are a responsible company. If it gets so hot and it becomes a law, we will comply. But it must be on record that we actually warned the nation about the potential damage and negativity this move can make and that is where we stand,” he said.

  • ‘Amended NLNG Act barrier to investments’

    Hopes for economic and industrial growth will be dashed if laws, such as the Nigeria LNG Limited (NLNG) Fiscal Incentives, Guarantees and Assurances Act, remain, NLNG Managing Director  Tony Attah has said.

    Attah spoke at the Nigeria Oil and Gas conference in Abuja titled: Nigeria’s gas sector – the catalyst for economic and industrial growth?

    “It is time for gas. We need deliberate decisions and policies to decouple oil from gas and attract investment. We need to do that now. Investments in the gas and LNG industry are declining. It is already difficult as things stand to find Foreign Direct Investment (FDI) and growth in the gas industry has been cautious after the recent down-beat global crude oil price. In addition to this, Nigeria is ranked 167 of 189 countries in the ease of doing business index.

    “Yet, experts maintain that there is the strong likelihood of increased gas demand infuture and that is where the silver lining is. However, if we continue with the self-inflicted barriers in our gas industry, we might miss the opportunity to make this country a major player in the global energy mix,” he said.

    He said the industry has benefited the economy, diversified the country’s revenue and export base as well as channelled FDI into it. It has created jobs and contributed significantly to the local manufacturing capacity in the country. But all that would be laid waste if we continued to shift policies and renege on international agreements that put some framework into the business and generated investor confidence, he added.

    ‘’We need to be creative with incentives that will attract investments and preserve the sanctity of contracts and agreements for all of this to come together in our national interest,’’ he said.

  • NNPC subsidiary denies responsibility for explosion at NLNG

    NNPC subsidiary denies responsibility for explosion at NLNG

    Integrated Data Services Limited, IDSL, a Subsidiary of Nigerian National Petroleum Corporation, NNPC, has explained that it was not responsible for the pipeline explosion which occurred Friday at a Nigeria Liquefied Natural Gas Limited, NLNG, pipeline in Emohua Local Government Area, Rivers State.

    IDSL said its operation crew which was engaged in acquiring seismic data for SPDC in Oil Mining Lease, OML, 17/22 ROBO 3D prospect, observed approved safe distance standards contained in the Department of Petroleum Resources’, DPR, regulations and as such could not be the cause of the blast.

    The IDSL, according to a statement that the NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu in a statement yesterday said that:“Our activities involve the use of seismic explosives of size 2kg and detonators. The drilled and exploded depth is 45 metres. At this depth the effect on the surface cannot affect any structure.

    “The suspected gas leakage on the gas pipeline between Eveku and Rumodogo 1 communities in Emohua Local Government Area of Rivers State of February 22, 2017 was not caused and cannot be caused by NNPC, IDSL Party 05 seismic operations. Our closest activity around the incident area yesterday was 798 metres away from the pipeline”, IDSL stated.

    As a responsible corporate body, IDSL’s crew on operation in Emohua Local Government Area observed, to the letter, DPR’s regulations governing such activities which include: maintaining a minimum distance of 25 metres from tarmac roads, 50 metres from houses, 100 metres from pipelines, and a minimum distance of 200 metres from well heads or oil wells.

    IDSL crew was 798 metres away from the exploded pipeline.

    Relevant authorities in Rivers State have been informed of the incident.

  • PENGASSAN rejects proposed NLNG Act amendment

    PENGASSAN rejects proposed NLNG Act amendment

    The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has opposed the  House of Representatives’s plan to amend the NLNG (Fiscal Incentives, Guarantees and Assurances) Act, describing it as unnecessary.

    It said: “The amendment can cause imminent losses that will far outweigh any doubtful gains.”

    In a statement titled: “Proposed amendment of the NLNG Act: Economic and security implications for the nation,” signed by PENGASSAN President Comrade Francis Johnson, and Acting General Secretary Comrade Lumumba Okugbawa, the union said the amendment would impact negatively on the image of the country.

    PENGASSAN argued that the international community would perceive Nigeria as a country which does not honour its promises nor take its calls for foreign investments serious.

    The amendment, it said, could affect $25 billion foreign investments, 18,000 jobs from NLNG’s Train 7 and 8 programmes, and negate the job creation and security policy of the Buhari-led administration.

    The union added that the National Assembly’s  proposed action would also not only affect recent gains from the reduction in gas flaring – from 65 per cent to less than 20 per cent – and lead to the loss of up to $124 million yearly paid as taxes and dividends to the Federal Government.

    The union noted that it was essential that the country get the confidence of the international investor community to sustain critical investments, especially the stalled Brass and OK LNG projects.

    ”Our legislators should make laws that will improve existing businesses in the country and also attract new investments, and not laws which will stifle business, employment and/or erode investor confidence. The interest of the Nigerians must remain paramount,” the union said.

  • NLNG boosts supply of cooking gas for market stability

    NLNG boosts supply of cooking gas for market stability

    The Nigeria Liquefied Natural Gas Limited (NLNG) has increased the supply of liquefied petroleum gas (LPG), commonly called cooking gas, to ensure market stability and reduce the commodity’s price.

    NLNG General Manager, External Relations, Kudo Eresia-Eke, said the commodity’s availibility   would bring down price and also enhance energy security. “Energy is important to Nigerians and the economy. Bringing stability to the product Nigerians use is important to us as a company. We are passionate about what concerns Nigerians,” he noted.

    Eresia-Eke noted that the price of the product has started coming down and assured that with more supplies the price will further drop. A survey by The Nation also confirmed that the price has gone down by N500 and more, per a 12.5 kg, depending on the area of purchase. In some LPG filling plants in Ikeja, a 12.5kg cylinder sells for N4,500 or less as against N5,000. In some NNPC retail outlets, however, a 12.5kg cylinder still goes for N4,800.

    Nevertheless, Eresia-Eke said NLNG has chartered a vessel dedicated to bringing the product from its Bonny Island plant in Rivers State to terminals in Lagos until it floods the market with the product.

    The chartered vessel, Gaz Providence, has the capacity of 13,126.6 metric tons, which equals 1,000,040 of 12.5kg cooking gas cylinders. “The vessels discharged in January and could have done more if not for delays at the terminals in Lagos,” the NLNG spokesman said.

    He continued: “The delays to vessel discharges at the receiving facilities (terminals) in Apapa, Lagos, is as a result of its multi-use nature with berthing priority accorded to vessels discharging other oil products such as petrol, kerosene and diesel.

    “For instance, NLNG’s dedicated LPG vessel was unable to discharge LPG at Apapa port between December 29, 2016 and second weekend in January 2017 due to jetty unavailability. This was what resulted in the temporary product shortages in the market and consequent high price.

    “We are, however, glad that the media took the opportunity of the scarcity period to stress the need for the provision of enabling facilities such as landing jetties in other parts of the country like Port Harcourt and Calabar, among others, to support NLNG’s commitment to supply of LPG to domestic market.”

    Eresia-Eke noted that on their part as a company, they are also working with relevant stakeholders to eliminate bottlenecks and improve operational efficiencies to ensure product availability and help correct market price distortions.

    He stressed that while NLNG was committed to the supply of LPG, it was instructive to note that the issue of pricing was based on an international price index plus 50 per cent of the shipping cost of delivering the product to receiving facilities in Apapa, Lagos. That price was invoiced in naira at the prevailing official interbank exchange rates.

    “The reality is that LPG is produced and consumed locally, but like crude oil, it is an internationally traded commodity with an international price benchmark that is open to global demand and supply pressures.

    “NLNG has, however, over the years, made efforts to soften the impact of price variations by subsidising the cost of transporting about 40 per cent of total domestic market share, which it supplies from its production facility on Bonny Island and increased supply from 250,000mt to 350,000mt,” he added.

  • Let NLNG be

    Let NLNG be

    •NASS should rather seek to replicate its business model, not sully it

    The common saying is: if it ain’t broke, don’t fix it. Or, don’t change a winning formula. This simple principle ought to apply to the Nigeria Liquefied Natural Gas (NLNG). The 28-year-old firm can be described as the flagship company of the Nigerian oil industry, having remained a success story since inception.

    Established by the NLNG Act and incorporated in 1989, the company has a clear-cut duty to harness the vast natural gas deposit in Nigeria. Four major shareholders own the company with equity participation as follows: Federal Government of Nigeria, represented by NNPC (49%); Shell (25.6%); Total LNG Nigeria Limited (15%) and Eni (10.4%).

    Its major products are Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs). It also supplies about 40% of Nigeria’s liquified petroleum gas (LPG or cooking gas). Based in Bonny Island in Rivers State, it is developed in trains; it has six trains operational while the seventh and eighth are in development.

    The joint venture company which started with an initial investment of about $6 billion has generated over $90 billion in revenues and currently has an asset base of about $11 billion. It also has two subsidiaries – Bonny Gas Transport Limited (BGT) and NLNG Ship Management Limited (NSML).

    Apart from employing thousands of Nigerians, NLNG’s activities have reportedly reduced gas flaring in Nigeria from about 65% in 1999 to about 20% today, with the figure liable to reduce further when trains seven and eight are completed.

    According to a communique by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN ), NLNG has since inception paid to the Federal Government, over $15 billion as dividends; $5.5 billion in taxes and N51 billion in levies, among other benefits.

    The foregoing is by way of back-grounding. The crux of the matter here is that a bill to amend the NLNG Act is currently before the National Assembly. Stakeholders, including PENGASSAN, insist that such an action would be tantamount to sabotage and hardly in the interest of Nigeria.

    Proposed amendment include a deletion of government’s  undertaking to honour shareholders’ agreements and contracts; a deletion of assurances by government to retain agreed fiscal and security regimes of the investment; and the need to make NLNG contribute three per cent of its annual budget to the Niger Delta Development Commission (NDDC). Only upstream oil firms pay this levy currently.

    We agree with other Nigerians who think the NLNG should be left well alone. The reason is simple: the NLNG is no doubt the best thing going for the Nigerian National Petroleum Corporation (NNPC) and indeed the Federal Government as far as the oil industry is concerned. It is a multi-national special utility investment vehicle which has performed quite well and made handsome returns since inception.

    The benefits the firm has brought to the industry and the nation are numerous and to unilaterally tinker with some basic agreements that set it up is bound to injure Nigeria’s credibility in international financial circles. It is noteworthy that the firm was built largely from international financing based on certain agreements and assurances.

    Of course change would be inevitable at a point but there is need to build consensus among shareholders. While we think the NLNG should contribute to the NDDC, negotiation would bring about mutual understanding on the imperative for this.

    And if the National Assembly feels so strongly and justified in updating the agreements binding the NLNG, it must be done with utmost good faith, openly and transparently: this will include wide consultations and a series of public hearings. We feel uncomfortable at what seems like a recent untoward interest in the NLNG. Not long ago, another government agency tried imposing a levy on it; recently, there was a campaign to sell a bit of Federal Government shareholding, and now this.

    We appeal for caution; we urge the National Assembly (NASS) to rather enact laws to allow many more firms like NLNG take root in Nigeria. For instance, the same principles can be applied to build refineries, petrochemical complexes and large, integrated, modern ranches, for instance.

    The NASS should seek to expand our possibilities instead of seeming to limit us.

  • NLNG’s vessel with 13,000mt of cooking gas berths in Lagos

    NLNG’s vessel with 13,000mt of cooking gas berths in Lagos

    Avessel chartered by the Nigeria Liquefied Natural Gas Limited (NLNG) and laden with 13,126.6 metric tons of cooking gas or liquefied petroleum gas (LPG) will today berth in Lagos for discharge in continuation of the firm’s efforts to ease scarcity and reduce the price of the commodity that is currently between N5,000 and N6,000 for a 12.5kg cylinder depending on the area of purchase.

    The General Manager, External Relations, Kudo Eresia-Eke said the vessel – Gaz Providence, as at yesterday was at Lagos offshore, alongside the NOJ jetty waiting for berth to clear before proceeding to discharge and will certainly berth today.

    Gaz Providence had discharged the same volume of LPG in the second week of this month. According to him, 13,000 metric tons of LPG can fill 1,040 12.5kg cylinders.

  • NLNG floods Lagos with 13,000 tonnes of cooking gas

    NLNG floods Lagos with 13,000 tonnes of cooking gas

    • NNPC, Sahara Energy tackle shortage with vessels

    The Nigeria Liquefied Natural Gas Limited (NLNG) said it has started the supply of liquefied petroleum gas (LPG), commonly called cooking, to Lagos to ease its shortage and attendant high prices.

    The firm in a statement endorsed by its General Manager, External Relations, Kudo Eresia-Eke said NLNG’s LPG vessel successfully discharged 13,000 tonnes of LPG to Lagos jetty at the weekend. He added that the vessel is scheduled to return to NLNG’s facility in Bonny to reload the product.

    “NLNG continues its efforts to ensure adequate supply and price stability to the market,” he added. Nigeria LNG is the sole local supplier of the cooking gas to the domestic market. LPG marketers complement such supply with imported LPG from the neigbouring countries such as Niger Republic.

    Meanwhile, the West Africa Gas Ltd (WAGL), a joint venture firm of the Nigerian National Petroleum Corporation (NNPC) and Sahara Energy will today, unveil two LPG vessels in Ulsan, South Korea that would  be game changer in the LPG supply network.

    It raised the hope that the supply logjam that impedes stable availability of the product would soon become history.

    Its Group Managing Director, DrMaikantiBaru, who spoke at a Pre-Naming Ceremony Dinner yesterday in Ulsan, South Korea, said he was delighted that the venture which was established in 2014 had started to record success even within a short span.

    NNPC Group General Manager, Group Public Affairs Division, Mr. NduUghamadu, who disclosed this in a statement, noted that Baru said the milestone was a boost LPG business in Nigeria.

    As it is customary, ships are named by the spouses of the sponsors, often referred to as “godmother of the vessels”.

    In this case, spouses of the GMD and COO Gas & Power will perform the naming ceremony.