NLNG restates commitment to Niger-Delta
Nigeria LNG Limited (NLNG) has restated its commitment to the development of the Niger-Delta and willingness to partner with government agencies, including the Niger Delta Development Commission (NDDC), to develop the region.
Speaking at a public hearing called by the Federal House of Representatives Committee on Gas Resources on a bill to amend the NLNG Act, the Managing Director of the company, Babs Omotowa said “NLNG is one of the biggest promoters of Corporate Social Responsibility in the area, supporting education, infrastructure development, and entrepreneurship.”
“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.
“This will 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 honour agreements,” he said.
Omotowa emphasised that keeping agreements entered into with investors is 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, 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% of which the Federal Government owns,” Omotowa said.
He said incentives granted to NLNG are not peculiar to Nigeria.
“They were granted to encourage investments in gas utilisation to reduce flaring which has become a major problem for the country. 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,” he said.
The NLNG chief executive remarked that 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 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 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 said.
NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49 per cent), Shell Gas BV, SGBV, (25.6 per cent), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4 per cent.