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Tag: NLNG

  • NDDC, NLNG square up over 3% remittance

    NDDC, NLNG square up over 3% remittance

    The Niger Delta Development Commission (NDDC) is presently locked in battle with Nigeria LNG Limited over the alleged refusal of the latter to pay three per cent remittance to the Commission as stipulated by the NDDC Act. In this report Ibrahim Apekhade Yusuf examines the contentious issues

    For how long can a company actually remain in pioneer status? Should a company enjoy tax holiday in perpetuity? Between profiteering, selfish aggrandisement and nationalism, which should come first? Is the NLNG Act truly an ass?

    These are some of the posers raised by the management of the Niger Delta Development Commission on the one hand and the Nigeria LNG Limited on the other hand as the controversy over the payment of three per cent remittance to the Commission rages.

    Crux of the matter

    At issue is that the NLNG Act states inter alia that the NLNG Ltd, is not a “gas processing company” in the context of the NDDC Act and as such cannot be subject to any new laws, taxes, dues or other obligations enacted or prescribed in Nigeria after 1993, except such laws, taxes or obligations are generally applicable to all companies registered in Nigeria. Thus, it lays claims to a special exemption granted in perpetuity to NLNG Ltd by virtue of Section 9 of and Clauses 2, 3, 6 and 15 of the 2nd Schedule to the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act 2004, previously Decrees Nos. 39 of 1990 and 113 of 1993 (herein also called the “NLNG Act”).

    A case for amendment of NLNG Act

    As to be expected, there have been strident calls for the amendment of the NLNG Act. Naturally, one of those that have mulled the idea of amendment is the NDDC, for obvious reasons.

    In a memorandum submitted by the Acting Managing Director of the NDDC, Mrs. Ibim Semenitari to the House of Representatives Committee on Gas resources at the public hearing on “A Bill for an Act to Amend the NLNG Fiscal Incentives, Guarantees and Assurances Act CAP N87, Laws of the Federation of Nigeria, 2004”, held at the National Assembly, Abuja, last April, she said the need to amend the NLNG Act is an idea whose time has come.

    Citing the NDDC Act of 2000, which established the Commission, Semenitari said by the explicit provisions of section 14 (2) (b) of the NDDC Act, “gas processing companies” operating in the region are amongst operators in the petroleum industry specifically required to pay to the NDDC Fund “three per cent” of their annual budgets.

    She, however, regretted that unfortunately, amongst many companies who default on this statutory obligation some by not paying the full amounts, including the Nigeria LNG Ltd, which rakes in profits in excess of over N500bn annually yet has adamantly refused to pay its statutory contributions to NDDC since the establishment of the Commission some 16 years ago.

    The NLNG Act, the NDDC boss declared, “Violates the laws, public policy and national interest of Nigeria in several other ways. NDDC’s direct interest is in highlighting the unconstitutionality of the above cited provisions of the NLNG Act, which the Act purports cannot be amended (by the National Assembly) except with the prior written consent of NLNG Ltd and each of its shareholders. NLNG Ltd’s defiant posture is an unlawful and gross impediment to the fulfillment of the development objectives spelt out in the NDDC Act.”

    Naturally, the NDDC prayers to the committee at the hearing was to among others, pass a resolution and take such other steps as may be expedient to cause the current text of the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act to be modified to bring it patently into conformity with the Constitution of the Federal Republic of Nigeria, in line with S. 315 of the Constitution, by deleting or omitting from the text of the NLNG Act Section 9 thereof and Clauses 2, 3, 6 and 15 of the 2nd Schedule thereto.

    A stakeholder’s perspective

    Speaking in an interview with a cross-section of journalists in Abuja, Prof. Jasper F. Jumbo, Wari Alabo (House Chief) of the Jumbo Major House, one of the largest community houses in gas-rich Bonny Island of Rivers State, said the NLNG has taken the country for a ride for too long.

    Jumbo who chairs the Niger Delta Projects Consortium as well as the Caretaker Committee and Traditional Head of the Jumbo Major House in Bonny Local Government, recalled that he was one of those who drafted the NDDC blueprint during former President Olusegun Obasanjo’s regime and as such should know better.

    “I participated in the scoping and scoring of the NLNG Environmental Impact Assessments (EIA) between 1997 and 1998, and the Jumbos are part landlords to the NLNG because Shell gave part of the contiguous Bonny Oil Terminal land we part-own with the Brown Major House of Finima to the NNPC which in turn, gave it to the NLNG. So, following the law of contiguity, the Jumbos are also part landlords to the NLNG,” he stressed.

    At the risk of being accused of taking sides, Jumbo says matter-of-factly that he is not against Nigeria giving tax waivers for any new project but considers NLNG’s haughtiness annoying.

    “If the NLNG wants to tell reasonable patriots to go to “hell”, their insensitivity may in years ahead, when the youths get more enlightened of the cheating, eventually snowball and affect the country. We expect the NLNG to help the NDDC to do the job it was set up by the Federal Government to do. We are trying to solicit for peace and the stability of the Niger Delta and the NLNG like any other gas company in the country must pay the three per cent remittance. That is the beginning of the dialogue.”

    Besides, he said claims by the NLNG that it has provided thousands of scholarships for young people to acquire quality education, is a ruse.

    “When they say they are giving thousands of scholarships, how many Bonny indigenes have those scholarship? The vocational school they have is a GCE level vocational school. Is that what you expect our boys to work with in a high level capacity, when that cannot even fetch a middle level manpower vocation for the development of our people?” he queried.

    Also speaking on the faceoff between the NDDC and the NLNG, Dr Sotonye Frank, a law lecturer gave further insights, saying the NLNG Act has some lacunas.

    According to him, it is inevitable that: “The NLNG Limited shall continue to rely on some clause in its Act to refuse to make its statutory contributions to the NDDC thereby depriving the Commission of significant revenue to carry out its mandate. Beyond the NDDC, the NLNG Ltd will also continue to rely on the stabilisation clauses to evade its obligations under validly enacted laws in Nigeria. This has several present and potential impacts for Nigeria.”

    It is against this background that the ongoing amendment process must be welcome by all Nigerians who have an interest in the sustainable development of the Niger Delta in particular and of Nigeria in general, he stressed.

    Going down memory lane, the law professor said: “The NLNG Act was first promulgated as a military decree in 1990 (Decree No. 39 of 1990). However, the provisions exempting the company from complying with new laws and taxes were added to the Act through an amendment decree signed by the late General Sani Abacha.”

    Specifically, he said the amendment decree was signed on 18 November 1993 by Sani Abacha who only assumed power the evening before (i.e. on 17 November 1993) through a military coup. “This illegitimate circumstance in which the guarantees and commitments were given is enough reason to amend the Act. The current government runs on an anti-corruption and transparency platform. It cannot, therefore, be seen to be stabilising illegitimacy.”

    The National Assembly, he stressed, “Must therefore be commended for kick-starting the process of amending the NLNG Act. The Act, as presently enacted, poses a substantial threat to the sustainable development of the Niger Delta in particular and Nigeria in general. There is therefore an urgent need to amend the Act in order to ensure that NLNG Ltd complies with the provisions of all laws validly enacted by the National Assembly, including the NDDC Act.”

    NLNG’s position

    Expectedly, the management of the NLNG Limited has maintained that it is being vilified for no just cause.

    Speaking at the public hearing on a bill to amend the NLNG Act, the Managing Director of the company, Babs Omotowa said no matter what it remains committed to the development of the region.

    “As evidence of our commitment to the development of the Niger Delta, NLNG has spent $177 million in the areas of infrastructure, education, etc in the region. So it is not an issue of reluctance to support Niger Delta, but one of ensuring we work within the confines of the law and honour agreements and promises to maintain the valued reputation of our country in international business,” he said.

    He stated that NLNG needs to be in the position to continue to support the region through being a successful Nigerian company, bringing value to the Delta and the nation in general, but that this would only be possible if the promises made to investors are not broken by amending the NLNG Act, which would certainly portray the country as one that does not honour agreements.

    The intervention of NLNG, Omotowa emphasised has more than any other single factor, led to the progressive decline in Nigeria’s gas flaring profile over the years, from well over 65% in the 1990s, to less than 20% today.

    Speaking further, he said: “It goes without saying that the NLNG Act has been pivotal to the commencement of the project in the first place, and for the huge success the company has represented for Nigeria, with the country reaping over US$33billion from its initial investment of US$2.5billion. The Act enabled the company to grow from its original 2-Trains to 6-Trains, creating an asset base of US$19 billion,49% of which the Federal Government owns.”

    He clarified that “Incentives which have been granted to NLNG are not peculiar to Nigeria. They were granted to encourage investments in gas utilisation to reduce flaring which had become a major problem for the country. Examples of similar incentive initiatives abound in Angola (12 years), Oman, Malaysia, Qatar and Trinidad (up to 10 years). Other more generous incentive schemesalso exist in Nigeria, in the Free Trade Zones.”

    NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%),  Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).

    Echoing similar sentiments, Dr. Kudo Eresia-Eke, General Manager, External Relations Division, NLNG, in a chat with The Nation at the weekend, said nothing should be done to bring the name of the country into disrepute.

    “What we’re struggling for is for the image of Nigeria because if they get away with what they want to do it will bring the country to disrepute. It is not a question of reluctance. Those who invested in NLNG were promised that nothing in the Act would change. That’s why they brought in their money. There is nothing personal. It is not about whether we don’t want to pay.”

    The Attorney General of the Federation and the NNPC during the hearing, Eresia-Eke recalled, at separate papers stoutly defended the NLNG Act.

    “If you even look at the NDDC Act what it says is that the funds will be paid by companies polluting the environment. We’re not polluters. Rather than being a polluter, we are buying up gas that would have otherwise being flared. The only company that has made a serious dent on gas flaring is the NLNG. We’re actually the No 1 cleaning agent in the Niger Delta. We’re committed to a better environment and improving lives.

    “We also need to explain that the gas we use is not being produced by the NLNG. We only buy from those who are engaged in the processing and exploration. We don’t do any of that. It’s a buying cassava from a farmer and processing it into garri.  What the law says is that the NDDC should direct its inquisitions to the producers. Fortunately, we are not producers.”

    As the controversy over the three percent remittance rages, the last may not have been heard of the matter.

  • NLNG showcases CSR system to Korean community

    NLNG showcases CSR system to Korean community

    Upon request by the Embassy of South Korea, Nigeria Liquefied Natural Gas Limited (NLNG) has presented the model of its corporate social responsibility (CSR) to the  Business Community, revealing its strategies and key success factors.

    The invitation was inspired by the enviable impact of NLNG’s efforts in improving the lives of its host communities and numerous stakeholders in the country, the firm said in a statement.

    NLNG’s General Manager, External Relations, Dr. Kudo Eresia-Eke, said the main secret to the company’s CSR success was its commitment to being a trusted partner to all its stakeholders for the sustainable development of Nigeria and its host communities.

    Eresia-Eke attributed NLNG’s success to its corporate values of integrity, excellence, teamwork and caring, especially the company’s ability to listen to the stakeholders, learn from them, be fact-based, think sustainability and put the people and country first in all its CSR considerations.

    He said: “We are pleased for the opportunity to present our CSR model to the leadership of the Korean Embassy and business community. We view the invitation to do so as welcome recognition of the unique and effective projects we run in the communities and elsewhere as part of our corporate vision of a global LNG company helping to build a better Nigeria.”

    He illustrated with some of the company’s programmes/projects including sponsorship of the most prestigious literary and science prizes in Africa, The Nigeria Prize for Science and The Nigeria Prize for Literature, which come with cash prize of $100,000 each; the $12 million University Support Programme through, which it is implementing the construction and equipping of engineering laboratories in six selected Nigerian universities drawn from the country’s geo political zones, to mention a few.

    Eresia-Eke also praised NLNG’s host communities for providing the conducive environment for the company to do business, and actualise its CSR initiatives.

    The Korean Ambassador to Nigeria, Noh Kyu-duk, who led the delegation of top Korean diplomats and senior executives of the major Korean companies in Nigeria to the event commended the company’s CSR and thanked them for honouring its invitation. Korean companies represented at the presentation included Samsung, Daewoo, Hyundai, and Korean Energy Management Company Limited (KEMCO).

    Nigeria-South Korea trade and bilateral relationship have continued to grow since the establishment of ties in 1980. Today, the volume of trade between both countries has risen to over $4 billion, while Nigeria has also become South Korea’s 52nd largest export market and its 30th biggest source of imports.

    Recently, Nigeria LNG acquired six new build Dual Fuel Diesel Electric vessels from South Korea’s Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI) for $1.6billion.

  • ‘NLNG’s $12.9b dividends reinvested in gas projects’

    ‘NLNG’s $12.9b dividends reinvested in gas projects’

    The Nigerian National Petroleum Corporation (NNPC) reinvested  part of the $12.9billion dividends it received from the Nigeria Liquefied Natural Gas (NLNG) Limited on behalf of the federation into additional gas projects.

    NNPC insisted that although it did not remit the fund for eight years,  it was not missing.

    The Corporation said it deposited  the balance of the dividend with the Central Bank of Nigeria (CBN),  in line with the Federal Government’s directive on the Treasury Single Account (TSA).

    NNPC Group General Manager, Debt Management, Godwin Okonkwo, stated this in Abuja when the Nigeria Extractive Industries Transparency Initiative (NEITI) convened a stakeholders’ dialogue on the 2013 audit report of activities in Nigeria’s oil and gas industry, insisting that  NNPC had not committed any illegality in the management of the fund.

    He said the Corporation took and ploughed back part of the dividends to new trains that were built by  NLNG.

    Okonkwo listed the BrassLNG and Olokola LNG projects, as well as other gas projects it did not mention, as other beneficiaries from the dividend. The BrassLNG and OlokolaLNG projects have however remained on the ground.

    He said the reinvestment in NLNG was part of its equity share of the cost of such expansion in its trains. The NLNG currently has six trains, which produce 22 million tonnes per annum (MTPA) of LNG, saying that construction of a seventh train to complement the existing six train structure is however expected and this lift total production capacity to 30MTPA.

    NEITI had in the 2013 audit report it released last month, stated that while the NLNG paid dividends meant for the federation to the NNPC, the Corporation never remitted same to the government. It said the total of the dividend since 2005 had accumulated to $12.9 billion.

    Okonkwo said: “Before now, the position is that the NLNG belongs to the Federal Government and the NNPC is an arm of the federal government. The NLNG dividends are there and if there was any kobo that went out of it, it was done with the approval of the federal government.

    “No kobo leaves the NLNG dividend without appropriate approval. Part of the spending for NLNG dividends was the development of NLNG trains, BrassLNG and OlokolaLNG and is not right for anybody to say the money is now missing. “

    He further stated: “And with the current regime who says the NLNG belongs to the federation, the balance of the NLNG money has been moved over to the CBN (Central Bank of Nigeria). The money is not with the NNPC.”

    “Any amount removed from the funds was done with appropriate approval; like funding of the trains in the NLNG, the Brass and Olokola LNG projects and other gas related projects.

    “The balance of that we transferred through the TSA to the CBN. Nothing leaves there without appropriate approval. NNPC is not an unorganised place where people do things anyhow,” Okonkwo explained.

    Okonkwo, who also made efforts to justify transfer of oil blocks to the Nigerian Petroleum Development Company (NPDC), a transaction the NEITI flagged off as not following due process, explained that the objective for the assignment was well intended.

    He said the Department of Petroleum Resources (DPR) has however taken up the asset assignment and would now evaluate its appropriate value to determine if the federation was owed monies as suggested by the NEITI and other audit reports.

  • NLNG to take delivery of $1.41b vessels

    NLNG to take delivery of $1.41b vessels

    The Nigeria Liquefied Natural Gas Limited (NLNG) will this month receive the last of the six new vessels (ships) it bought for the transportation of liquefied natural gas (LNG) to various parts of the world.

    Its Managing Director, Babs Omotowa, told The Nation that five of the six vessels were delivered between November last year and March this year, adding that the last vessel will be delivered this month.

    Omotowa said the acquisition of the new ships became imperative as Train plant approaches nameplate capacity and LNG cargoes currently delivered to distant destinations across the world increases in response to changing business opportunities.

    To meet this demand, he said an arm of the NLNG, the Bonny Gas Transport, in 2013, ordered six new dual fuel diesel engine (DFDE) vessels to be constructed by Hyundai Heavy Industries (HHI), while  Samsung Heavy Industries (SHI) was ordered to build four.

    Financing for the six vessels, according to him, was arranged in two programmes: a-$310 million six-year additional programme debt (APD) facility and a-$1.1 billion 12-year new vessel debt (NVD) facility.  The APD, he noted, was additional indebtedness under 2006 vessel financing arrangement, while the NVD was a fresh facility with several international commercial banks and export credit agencies (ECAs) as lenders. These lenders include Korean Export-Import Bank (KEXIM) and Korean Trade Insurance Corporation (K-SURE). The deals were signed on March 26, 2013, he added.

    Omotowa said he was excited by the project because it created training for 600 locals in ship building in both Nigeria and the contractors’ shipyards in Korea. It also created an opportunity for utilisation of qualified Nigerians in the contractors’ shipyards as workforce for the construction of the vessels.

    Besides training and job creation, the project made use of suitable goods and services worth $10 million provided by local firms. It also led to the promotion of the establishment of a ship repair yard in Nigeria for in-country development of repair and maintenance capacity for LNG ships and other large carriers. The drydock yard in Nigeria will be supported by Samsung and Hyundai.

    With the drydock in operation, Nigeria and other neighbouring countries will no longer take their vessels to Europe and Asia for maintenance, he added.

    Omotowa also said the firm has shipped over 3,500 cargoes of LNG in its 15 years of operation, contributed substantial revenue to Federal Government’s coffer, as well as the state and local government where it operates.  Currently, NLNG accounts for seven per cent of the global LNG market and is the fourth largest LNG plant in the world.

    (NLNG) will this month receive the last of the six new vessels (ships) it bought for the transportation of liquefied natural gas (LNG) to various parts of the world.

    Its Managing Director, Babs Omotowa, told The Nation that five of the six vessels were delivered between November last year and March this year, adding that the last vessel will be delivered this month.

    Omotowa said the acquisition of the new ships became imperative as Train plant approaches nameplate capacity and LNG cargoes currently delivered to distant destinations across the world increases in response to changing business opportunities.

    To meet this demand, he said an arm of the NLNG, the Bonny Gas Transport, in 2013, ordered six new dual fuel diesel engine (DFDE) vessels to be constructed by Hyundai Heavy Industries (HHI), while  Samsung Heavy Industries (SHI) was ordered to build four.

    Financing for the six vessels, according to him, was arranged in two programmes: a-$310 million six-year additional programme debt (APD) facility and a-$1.1 billion 12-year new vessel debt (NVD) facility.  The APD, he noted, was additional indebtedness under 2006 vessel financing arrangement, while the NVD was a fresh facility with several international commercial banks and export credit agencies (ECAs) as lenders. These lenders include Korean Export-Import Bank (KEXIM) and Korean Trade Insurance Corporation (K-SURE). The deals were signed on March 26, 2013, he added.

    Omotowa said he was excited by the project because it created training for 600 locals in ship building in both Nigeria and the contractors’ shipyards in Korea. It also created an opportunity for utilisation of qualified Nigerians in the contractors’ shipyards as workforce for the construction of the vessels.

    Besides training and job creation, the project made use of suitable goods and services worth $10 million provided by local firms. It also led to the promotion of the establishment of a ship repair yard in Nigeria for in-country development of repair and maintenance capacity for LNG ships and other large carriers. The drydock yard in Nigeria will be supported by Samsung and Hyundai.

    With the drydock in operation, Nigeria and other neighbouring countries will no longer take their vessels to Europe and Asia for maintenance, he added.

    Omotowa also said the firm has shipped over 3,500 cargoes of LNG in its 15 years of operation, contributed substantial revenue to Federal Government’s coffer, as well as the state and local government where it operates.  Currently, NLNG accounts for seven per cent of the global LNG market and is the fourth largest LNG plant in the world.

  • NLNG disowns link to looted funds recovery

    NLNG disowns link to looted funds recovery

    Nigeria Liquefied Natural Gas Limited (NLNG) said its attention has denounced  the alleged link with the reported N115 billion loot published in the media, saying it was in bad taste to taint its image.

    According to its General Manager, External Relations Division, Kudo Eresia-Eke, the said media report titled: “N115 billion loot: Ex Air chiefs, politicians top refund list”, was said to have quoted an unnamed public official,  that “$3.1 billion was intercepted in the accounts of NNPC and NLNG and was yet to be moved to the Central Bank of Nigeria in line with the Transaction Single Account (TSA) policy”, defied the ethics of the profession..

    He said: “NLNG views this statement with utmost seriousness and wishes to denounce it as misleading and untrue.

    “To our knowledge, no NLNG’s accounts are the subject of any recovery effort by the EFCC or any other similar authority, more especially as NLNG is a private company and not a government agency or parastatal.

    “We are surprised that these misleading reports continue to be rehashed despite categorical statements by ourselves and third parties, including the Nigerian Extractive Industries Transparency Initiative (NEITI) to the effect that NLNG has no outstanding obligations to government.

    “We wish to use this medium to appeal to all concerned stakeholders to take the necessary care of checking the accuracy of information before publication.”

  • NLNG not linked to recovery of funds, says management

    NLNG not linked to recovery of funds, says management

    •’We’ve no outstanding obligations to govt’

    The Nigeria Liquefied Natural Gas (NLNG) Limited yesterday distanced itself from the Federal Government’s recovery of looted funds.

    The company, in a statement by its General Manager, External Relations Division, Dr. Kudo Eresia-Eke, reacted to this newspaper’s lead titled “N115bn loot: Ex-Air chiefs, politicians top refund list”.

    Its statement reads: “The said report quotes an unnamed public official, and states that ‘$3.1bn intercepted in the accounts of NNPC and NLNG which was yet to be moved to the Central Bank of Nigeria in line with the Transaction Single Account (TSA) policy’.

    “NLNG views this statement with utmost seriousness and wishes to denounce it as misleading and untrue.

    “To our knowledge, no NLNG’s accounts are the subject of any recovery effort by the EFCC or any other similar authority more especially as NLNG is a private company and not a government agency or parastatal.

    “We are surprised that these misleading reports continue to be rehashed despite categorical statements by ourselves and third parties, including the Nigerian Extractive Industries Transparency Initiative (NEITI) to the effect that NLNG has no outstanding obligations to government.

    “We wish to use this medium to appeal to all concerned stakeholders to take the necessary duty of care of checking the accuracy of information before publication.”

     

  • Amendment of NLNG Act right thing to do

    SIR: The current debate following the  Public Hearing on  the  proposed Amendment to the NLNG Act, to enable it begin to pay three percent of its total annual revenue to the Niger Delta Development Commission (NDDC), makes interesting reading.

    In a full page advertorial by Prof. Jasper F Jumbo, chairman and Traditional Head of the Jumbo Major House of Bonny, published in The Nation of Tuesday May 10, it was argued that “the Niger Delta communities which the NLNG project should develop substantially are brazenly disinherited, underdeveloped and marginalized and have remained at the negative receiving end of NLNG’s growth over the years”.

    Prof. Jumbo observed that the gestation period (pre and post operational holiday tenure) should have been fixed in that Act to read between 7 to 10 years and therefore supported the amendment of the NLNG Act to incorporate fixed tenure of the tax holiday. It was his observation that gas gathering into the NLNG plant crisscrosses several Niger Delta communities, dislodging their traditional occupational skills of fishing and farming as well as neighborhood ecological sanctity and general well being. It was therefore his contention  that, in the light of contemporary development and ecological problems in Bonny, Soku, Obioafu, Obrikom and other gas supporting communities in Rivers and Niger Delta, the unspecified gestation period tax waiver should no longer be allowed by the National Assembly to remain perpetual.

    Managing Director of NLNG, Babs Omolowa, in his presentation at the Public Hearing, also reported in The Nation Newspaper of May 12, stated that it is vital for the Federal Government to respect the sanctity of agreements with investors, so Nigeria would not be seen as a nation that breaks agreements. He stated that the “NLNG needs to be in position to support the region through being a successful Nigerian company bringing value to the Delta and the nation in general, but that this would only be possible if the promises made to investors are not broken by amending the NLNG Act which will certainly portray the country as one that does not honor agreements”.

    On analysis of the face value of the two sides of the argument, one sees some merit for each side. But on a scale of balancing, it is clear that the argument of Prof. Jumbo for and on behalf of the host communities of NLNG is infallible. There is no place in the world where Agreements, Conventions or even Laws and Constitutions are static and not subject to amendments. The American and even our Nigerian Constitution have been amended many times and the present one, 1989 Constitution (as amended) is still undergoing further amendment.

    There is therefore no reason why the NLNG Act should not be amended to reflect present realities. If, as its being complained of, that the level of application of resources for the development of the host communities of the NLNG is grossly inadequate, why shouldn’t the Act be amended, to make the goose that lays the golden eggs happy and be in a position to continue to lay the egg in a more convenient and comfortable environment?

    Yes the country may have reaped well over $33billion from its initial investment of $2.5billion in the NLNG project, as disclosed by the MD of the NLNG at the Public Hearing. But the question still remains how much of these have gone into the development of the host communities? You cannot be paying taxes, royalties and other levies to the Federal Government for the development of all parts of Nigeria while the particular areas which bear the burden of the operations of the project are neglected, abandoned and deprived.

    An amendment to the NLNG Act will provide impetus to giving more attention to these areas which may not have been factored in, at inception of the project. Otherwise youth restiveness in the area will continue. When this happens, will it be said that the main aim and objectives of setting up the NLNG has been achieved? Our national policy thrust should indeed, be guided more by our local needs and realities than by pleasing external interest which care little or nothing about our survival and fortunes.

     

    • Chike Okeke,

    Abuja.

  • Fed Govt, NLNG move to improve LPG supply

    Fed Govt, NLNG move to improve LPG supply

    The Federal Government,  the Nigerian Liquefied and Natural Gas (NLNG) and other stakeholders are working hard to bridge existing gap in the supply of liquefied petroleum gas (LPG) by preventing delay at loading terminal in Lagos.

    Also, they are working to improve funding of the sub- sector and use rail to move the product.

     Sources at the Northern Oil Jetty (NOJ) terminal in Lagos, said the NLNG initiated the partnership.

    NLNG’s Chief Executive Officer, Babs Omotowa, said operators were striving to remove bottlenecks in the supply chain of LPG.

    NLNG, he said, was talking to the government through the Office of the Vice President to improve supply of the product.

    According to him, NLNG has increased supply from 150,000 metric tonnes in 2007 to 250,000 metric tonnes and could supply 500,000 metric tonnes or more.

    NLNG, he said, has carried out a study which identified problems such as slow pace of growth of the terminals, use of some terminals for supply of petrol and smaller markets as drawbacks to the government’s goals of enduring that all Nigerians use LPG.

    The study, he argued, would help in fashioning out modalities that would assist in improving supply of the product nationwide.

    He said: “A study, which was carried out by NLNG, showed that there are some impediments in the supply of LPG in the country. The study identified problems such as the delay in offloading the LPG from the vessels that brought it from Bonny, Rivers State to Lagos and long hours of transporting the product by roads to different parts of the country. That is why we are talking to the Federal Government, investors in the oil and gas sector, and other interested parties on the issue of making LPG accessible by consumers.

    “Efforts are being made to explore the option of using trains to ferry LPG to users across the country. When we use trains to transport LPG to different parts of the country, we are trying to ensure that the product gets to users safely, faster and cheaper. For instance, if you truck cooking gas from Lagos to the North, you would have probably added $200 to the cost of transporting the product. This will inevitably increase the price of the product. But if you use the train, you are going to move bigger tonnes of LPG around the country.”

  • Why govt should respect agreements, by NLNG chief

    Why govt should respect agreements, by NLNG chief

    IT is vital for the Federal Government to respect the sanctity of agreements with investors, so Nigeria will not be seen as a nation that breaks agreements, the Nigeria Liquefied Natural Gas Limited (NLNG) has said.

    Its Managing Director, Babs Omotowa, said this at a public hearing of the House of Representatives Committee on Gas Resources. The hearing was on a bill to amend the NLNG Act so that it will begin to pay the Niger Delta Development Commission (NDDC) levies.

    He, however, reiterated the commitment of the company to partnering government agencies, including the (NDDC), to develop the Niger Delta, adding that it was  why the NLNG is one of the biggest promoters of Corporate Social Responsibility (CSR) in the area, supporting education, infrastructure development and entrepreneurship.

    He said: “As evidence of our commitment to the development of the Niger Delta, NLNG has spent $177 million in the areas of infrastructure, education etc in the region.  So it is not an issue of reluctance to support Niger Delta, but one of ensuring we work within the confines of the law and honour agreements and promises to maintain the valued reputation of our country in international business.

    “NLNG needs to be in the position to continue to support the region through being a successful Nigerian company, bringing value to the Delta and the nation in general, but that this would only be possible if the promises made to investors are not broken by amending the NLNG Act, which would certainly portray the country as one that does not honour agreements. Keeping agreements entered into with investors was crucial to retaining and attracting foreign investment into NLNG, as well as other sectors of the economy in line with the drive of the current administration.

    “The intervention of NLNG, more than any other single factor, has led to the progressive decline in Nigeria’s gas flaring profile over the years, from well over 65 per cent in the 1990s, to less than 20 per cent today. Therefore,2 aside from the fact that the company is earning revenue for the Federal Government and its other shareholders, it is cleaning up the Niger Delta environment in the process.

    “It goes without saying that the NLNG Act has been pivotal to the commencement of the project in the first place, and for the huge success the company has represented for Nigeria, with the country reaping over US$33 billion from its initial investment of US$2.5billion. The Act enabled the company to grow from its original 2-Trains to 6-Trains, creating an asset base of US$19 billion, 49 per cent of which the Federal Government owns.”

    He noted that the incentives which have been granted to NLNG are not peculiar to Nigeria. They were granted to encourage investments in gas utilisation to reduce flaring which had become a major problem for the country. Examples of similar incentive initiatives abound in Angola (12 years), Oman, Malaysia, Qatar and Trinidad (up to 10 years). Other more generous incentive schemes also exist in Nigeria, in the Free Trade Zones.

    Omotowa said the current amendment effort is most unusual as it attempts to enforce the payment of a levy from which an entity is expressly exempted by a valid and subsisting legislation in which the Federal Government of Nigeria gave unequivocal undertakings and declarations that induced significant investments.

    “As far as we are aware, this is the first time in the history of legislative practice in Nigeria that a proposal is being made to amend a law for the sole purpose of imposing a levy against a company for the benefit of an agency of government. We urge the honourable Committee not to lend itself to the establishment of an unjust precedent. To do otherwise would be to encourage other agencies of government who fail to make their case in judicial proceedings in court, to resort to legislative engineering to achieve what they failed to obtain in court,” he added.

  • NLNG restates commitment to Niger Delta

    NLNG restates commitment to Niger Delta

    Nigeria LNG Limited (NLNG) yesterday, at a public hearing called by the House of Representatives Committee on Gas Resources, restated its commitment to the development of the Niger Delta.

     It said it would partner government agencies, including the Niger Delta Development Commission (NDDC), to develop the region.

    At the public hearing on a bill to amend the NLNG Act, its Managing Director, Babs Omotowa said: “As evidence of our commitment to the development of the Niger Delta, NLNG spent $177 million in infrastructure, education, etc. in the region.  So it is not an issue of reluctance to support Niger Delta, but one of ensuring we work within the confines of the law and honour agreements and promises to maintain the valued reputation of our country in international business,” he said.

    He said NLNG’s intervention led to the progressive decline in gas flaring profile from over 65 per cent in the 1990s to less than 20 per cent today.

    Omotowa noted that “incentives granted to NLNG are not peculiar to Nigeria. They were granted to encourage investments in gas utilisation to reduce flaring, which became a major problem for the country. Examples of similar initiatives abound in Angola (12 years), Oman, Malaysia, Qatar and Trinidad (up to 10 years). Other more generous incentive schemes also exist in the Free Trade zones.”