As battle over NLNG Act rages; Cote d’Ivoire, Senegal move to create West African LNG hub
The House of Representatives on May 9, 2017, passed a bill seeking to amend the Nigeria LNG Limited (NLNG) Act (Fiscal, Guarantees, Assurances, and Incentives) subjecting the company to 3 percent Niger Delta Development Commission (NDDC) levy. As required by law, the bill will be progressed to the Senate for concurrence.
But in a quick reaction to the passage of the amendment by the lower House Chambers, the NLNG in a press conference yesterday in Lagos said that the amendments are not in the interest of Nigeria and it would be a huge error to pass the amendment into law as it is a direct collusion with the Federal government’s drive to attract Foreign Direct Investment (FDI).
“NLNG is proudly the country’s biggest and most successful indigenous company, run by 100 percent Nigerian management and over 95 percent Nigerian staff, yet competing effectively globally. It is today the country’s highest tax payer and the 4th largest supplier of LNG in the whole world”, said Kudo Eresia-Eke, General Manager, External Relations Division.
The NLNG spokesman said that NLNG succeeded largely due to the provisions of the NLNG Act, which gave investors the confidence to invest in the country. But with an amendment, that confidence will be eroded and jeopardize critical ongoing investments for the continued survival of the company; critical among which is the $1 billion needed annually for the next three years to guarantee the current operation of six existing Trains.
Eresia-Eke said that the amendment will also mean an immediate potential loss of foreign investment of $25 billion in respect of Trains 7 and 8 investments which will lead to loss of the expected 18,000 construction jobs for Trains 7 and 8 will also be lost if the Act is amended.
In response to the NLNG position, Businessday reported that leading members of the House of Representatives at the weekend unveiled plans to further amend the Act, with the view to provide for punitive measures for breach of the legislative framework.
The lawmakers also warned the operators to desist from all forms of campaign of calumny over the recently passed amendment bill which seeks to ensure payment of three percent of the annual budget of NLNG Limited into the coffer of Niger Delta Development Commission (NDDC).
“The issue of NLNG is a long standing one but I think they are arguing and talking and blackmailing from the point of greed and ignorance. As parliament, it is for us to make the law and the other executive will implement it.
“What we are saying, they were asked to pay certain percentage of their budget, profit for the development of the host community which is the Niger Delta. Of course , I must tell you that the Niger Delta Act is a discriminatory law done to reduce the suffering of the Niger Delta to create peace”, Uzoma Nkem-Abonta, chairman, House Committee on Public Petitions said.
While the battle rages, other countries in the sub-region are making progress with either huge natural gas finds or investment in the LNG space.
In Cote d’Ivoire, an international consortium led by the France’s Total SA plans to start construction of a LNG terminal by mid-2017. The project cost is estimated around $141.5 million.
The project involves the construction of a terminal with a floating storage and re-gasification unit (FSRU) in Vridi, Abidjan area, and a pipeline connecting the FSRU to existing and planned power plants in Abidjan, as well as to regional markets connected to the Ivorian network. This will enable Ivory Coast to become the first regional LNG import Hub in West Africa, and to meet both regional and domestic demand.
“This project illustrates Total’s strategy to develop new gas markets by unlocking access to LNG for fast-growing economies. Working closely with our partners enabled us to put together an integrated proposal combining LNG supply and import infrastructure through a floating storage and re-gasification unit,” said Philippe Sauquet, President Gas, Renewables and Power of Total.
In Senegal, BP and partners Kosmos Energy recently announced a new major gas discovery off Senegal able to feed a potential further LNG hub in the gas-rich West African basin. The Yakaar-1 exploration well drilling in the Cayar Offshore Profond block discovered 15 Tcf of gross gas resources, in line with pre-drill expectations, Kosmos said in a statement.
The find’s condensate-to-gas ratio is also on par with previous discoveries in the area, Tortue and Teranga, at 15-30 barrels per million cubic feet, it said.
“This discovery marks an important further step in building BP’s new business in Mauritania and Senegal,” BP’s upstream head Bernard Looney said in a separate statement. “The Yakaar discovery, coupled with the Teranga discovery, creates the foundation for a further LNG hub in the basin.”
Formerly known as Teranga West, Yakaar-1 lies in the Cayar Offshore Profond block roughly 95 km northwest of Dakar.
BP in December also pledged to spend nearly $1 billion, mostly in the form of a multiyear exploration and development carry, to acquire a 62 percent interest and operatorship of adjacent blocks offshore Mauritania in addition to its initial 30 percent stakes in Senegal licenses.
To date, the main discovery in the acreage is the 15 Tcf Tortue field that straddles the maritime border of Mauritania and Senegal.
Kosmos and BP are planning a near-shore LNG facility to develop the discovery, with a final investment decision expected next year and first gas in 2021. The companies also said they plan to test the Tortue discovery in mid-2017 and drill three additional exploration wells over the next 12 months offshore Senegal and Mauritania.
FRANK UZUEGBUNAM