The chairman Committee on Gas, Senator Bassey Albert Akpan, has promised that his committee will do all in its power to sustain the Nigeria Liquefied Natural Gas Limited legacy and encourage the entrenchment of the NLNG business model in other parts of the Nigerian economy.
This was contained in a statement on Tuesday by the company’s General Manager, External Relations, Dr. Kudo Eresia-Eke.
Akpan made the call when he led members of the committee on an oversight visit to the NLNG facility in Bonny on Monday.
Other members of the 11-person Senate team included Senators Bassey Albert Akpan Barnabas Gemade, Rose Oko Okoji, Rilwan Adesoji Akanbi, Danjuma Laah, Francis Alimikhena, Matthew Urhogide and Bubakar Moallahyidi.
They all commended the NLNG model and assured NLNG’s Senior Management of their continued support to promote and sustain the company’s successful operations.
Speaking after a business presentation by the NLNG’s General Manager Production, Tayo Oginni, the Senate Committee Chairman said: “I am particularly happy with what I have seen and heard today and I will be glad to have your comprehensive presentation slide to share with other members of the Upper Chamber to get them better informed.
“The Senate resisted calls for the sale of government equity in Nigeria LNG because we believe that Nigeria LNG is the most successful Oil and Gas venture in the country.”
Akpan said a business like NLNG, which has succeeded over decades, should be encouraged.
He promised that the company has the senators buy-in on the proposed Train 7 expansion programme which will potentially add an estimated 18,000 new jobs, while reinforcing the company’s position as a major player in the global energy market.
He noted that to achieve this, “we must be able to sustain our output to be able to sustain our profitability”.
Akpan said the visit provided a clear picture and understanding of the trends and issues involved in the business.
Earlier, the Managing Director and Chief Executive Officer of Nigeria LNG Limited, Tony Attah, told the visiting senators that NLNG’s Incorporated Joint Venture model granted it the capacity and autonomy to successfully approach the international capital market to source funds.
This model, Attah added, contrasts with the less flexible upstream unincorporated JVs, which are directly funded by the shareholders.
NLNG’s business model, he said, was made possible by the NLNG Act, which is currently being threatened by a proposed amendment by the National Assembly.
The NLNG MD added that the proposed amendment would have adverse implications for NLNG’s ability to continue its business profitably, to attract future investments, and to help build a better Nigeria.
Attah said: “NLNG needs all the necessary support to be able to go to the market to raise $15 billion for Train 7 investment, which is capable of generating 18,000 jobs.
“This will enable Nigeria resolve most of the youth restiveness in the country; help the company to remain a global player in the natural gas market, and to help build a better Nigeria.
Attah said Nigeria has sufficient proven and non-proven gas resources to the extent that the country was referred to in a global conference as “that gas country that has some oil”, whereas the country actually classifies its economic strength in terms of oil and not gas, adding that proven and estimated gas reserves at 187 and 600 TCF respectively are more than sufficient to serve domestic and commercial needs of the country.
He also pointed out that Nigeria LNG has helped to reduce gas flaring from 65 per cent at the commencement of its operations to about 20 per cent today, removing the country from the top of the list of erring nations, with a real chance of further improvement, if given the enabling operating environment including the actualisation of Train 7.
Attah said Nigeria LNG is faced with severe challenges, including operations of multiple regulatory agencies, pipeline security issues, citing 19 recorded pipeline disruptions this year alone as example.
He also alluded to the problem of double taxation, which is capable of impacting the company’s competitiveness and compromising its ability to maintain its position as the world’s fourth global largest gas supplier.
According to Attah, the situation if not checked, is capable of leading to a number of unfavourable consequences such as loss of revenue for the Federal Government, potential loss of jobs and loss of status as inspirational business model and number one indigenous company in the country.
On LPG supply to the domestic market, the NLNG MD said the structure is threatened as the system encourages tax-free importation of LPG while
NLNG supply is subjected to Value Added Tax, thereby frustrating the company’s effort to support and grow the local LPG market for which it already sets aside 250,000 metric tonnes annually.
Reacting to the issues one after another, the visiting senators repeatedly recognised and expressed support for Nigeria LNG operations and successes so far.
They assured that they would do all in their power to support the good work at NLNG by taking a serious look at the issues raised, to enable the company and the nation remain successful.
The Committee agreed that from what they saw, there is strong evidence that the company is well run.
They also observed with satisfaction that the plant from which this success story has been created is operated by Nigerians.
They however expressed the need for the company to help the nation achieve zero gas flaring while also indicating their concern about how to sustain the aging plant, expedite the train 7 project and maintain the successful NLNG model.
NLNG, owned by four shareholders, namely the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation (49%), Shell Gas BV (25.6%), Total LNG Nigeria Limited (15%) and Eni International (N.A,) N. V. S. a. r. l (10.4%), is committed to helping to build