‘NLNG should not take N300Bn heavy vessel repair yard to Badary’

– Rivers entrepreneurs and investors group

The plan by the Nigeria Liquefied Natural Gas (NLNG) Company to build a heavy duty vessel repair centre known as Very Large Crude Carriers (VLCC) in Badagry, Lagos State, for its fleet has come under attack.

The Rivers Entrepreneurs and Investors Forum (REIF) has kicked against the proposed project on the ground that it was being taken out of the oil zone and off the vessels route to another region of Nigeria, saying the decision was against business sense.

The president of REIF, Ibifri Bob- manuel, laid bare the anger of the local business people in an interview with BusinessDay confirmed murmurs in the Niger Delta business circles over the location of the sensitive project.

He said: “Well, it shows how business deci- sions are made in Nigeria. Your location decides 70 per cent of the success of the venture. It’s unfortunate that NLNG is doing that kind of thing, situating it in faraway Badagry; in partnership or not”.

He sternly observed that if the NLNG was going to embark on such a gigantic project, commonsense required that they should locate it in the area where it would have direct impact on where it was doing business.

“So I think it is a very good move by realising they should set up this kind of facility but the location is going to be a waste of resources. We at REIF oppose this move. They should cut down in cost. Whey would NLNG want to go far away. It means if any vessel is bad, you would have to tow it to Badagry. That is why many ventures in Nigeria fail”.

Bobmanuel called on the NLNG to do proper feasibility study, saying if such was such was done, no person would advise then to go to Badagry when they had other areas in Bonny, Finima, and other parts of the oil re- gion.

“If I am going to invest $1.6bn, I would not risk going away because if the host communities react, that you have robbed them of opportunity, it would be bad. The project is going to attract foreign direct investments and other projects, and so, the host communities have a right to argue that you are depriving them of such a huge opportunity. You could as well take the NLNG and relocate it to Badagry”.

While rolling out the plan in De- cember 2014, the NLNG had said feasibility studies rejected Bonny and other spots and gave flowering reasons why Badagry was the best.

It was stated that feasibility studies for citing the dry-dock were carried out in seven places: Badagry, Lekki FTZ, Ladol Island, Ogogoro Island, Olo- kola FTZ, Onne and Bonny, before consultants identified Badagry as the best-in-class location for the dockyard.

REIF however rejected that position; “It does not make sense. That is why you see pipelines running from Port Harcourt to faraway north, you then have to bring back the product here, it is round-tripping. It is wrong. If you were a business man, would you take the dockyard to Badagry? The answer is no. So, we are going to kick against this (provocative move). We are going to engage the NLNG, the chiefs, the state government, the foreign partners, the embassies, Federal Government, etc on this to make them see reason why they need to do things right. We hope common sense will prevail when we do engage them. We want this particular project to success, and for it to succeed, it has to be situated in the right place right away. That is why we are not going to rest on this”.

Speaking more on feasibility study, the REIF president added: “If you are emotionally attached to a feasibility report, the outcome would be different. It is centred around emotions. If you look at the routes, you will realise that NLNG is situated in Bonny because it is the most strategic point to evacuate gas out of Nigeria. The NLNG has ves- sels that stay in Bonny and leave. Other vessels come to Bonny to lift too. If you now want to service those vessels, you begin to round-trip to Badagary? It does not make sense. It should be located around the source of your operations. It makes economic and management sense to locate it in Bonny or within the oil region or the ship route so that the Management can walk across and supervise things instead of going for hours to inspect it”.

The entrepreneur would not want to believe there were political con- siderations behind the decision but felt sentiment could be the problem.

“I am a businessman and would not want to look at political reasons. As a businessman, I should search for busi- ness sense because I cannot have my base and vehicles in Port Harcourt and take my mechanic workshop to Kano, even if is my town. NLNG is building six new vessels and the agreement with the builders is to come to Nigeria to maintain them, but why take them to another angle of the country? You have deprived the direct environment of the new business. You should be trying to smoothen your business relationship. This new project attracts a whole lot of skill transfer which could motivate the community. When you take this project away, you have started eliminating the nearby communities from their benefit. You do not need to stir things. NLNG is one of the best models and nobody should cause problem for the company. That is why we will write to all those that ought to act”.

On reversibility of such a decision, Bobmanuel said: “It is reversible, even if we have to go to court. i have nothing to gain as a person but we have to put something back to the society. As a businessman I know we must take away sentiment so that things can go well in Nigeria. If you ask me to take NLNG to Kano, it will never work because you would have to expose your busi- ness to greater risks and greater costs; vandals, etc. Again, the business has a global competition and you should not be adding cost and risks to yours. The longer the distance to source of raw material the more you expose the business to risks. It is not a good business decision. We call on the NLNG authori- ties to revise this decision, and we will see how to take this to the next step”.

NLNG has 13 vessels transporting gas to its clients around the world and has commissioned its partners for the construction of another six.

The company has trains one to six but plans for Train 7 ran into delays due to alleged political interference, same reason why plans for two other plants in Nigeria that would have moved Nigeria from 10th to 2nd in global nlg market have been stalled.

Now, a project such as the dockyard for very large crude vessels is run- ning into storms due to decisions that are said to be based not purely on business principles, ready to stir the ever-sensitive host communities.

The managing director of the NLNG is Babs Omotowa while Temi Okesanjo is the Nigeria LNG’s Gen- eral Manager, Shipping Division.

A top manager who is not authorised to speak at this point in the matter however told BusinessDay source that NLNG was not the one bringing the money for the project but merely attracted it, only to be funded by the builders.

He said the NLNG only paid for the feasibility studies which he said was conducted by experts outside Nigeria.

Despite this, however, members of REIF said the dockyard should be located near the operational zone of the NLNG, whether it was the one funding or not, if the company wanted to be seen to be making sound business decisions.

IGNATIUS CHUKWU