The House of Representatives passed the bill seeking to amend the NLNG (Fiscal, Guarantees, Assurances, and Incentives) Act, subjecting the company to three per cent Niger Delta Development Commission levy.
The NLNG immediately reacted to the development in a statement, saying the amendment violated the assurances and guarantees granted the investors by the country, which paved the way for the huge international investment that enabled the company to become a reality and the success story.
The company is owned by four stakeholders, namely: Federal Government, represented by the Nigerian National Petroleum Corporation (49 per cent), Shell (25 per cent), Total LNG Nigeria Limited (15 per cent) and Eni (10.4 per cent).
The Vice-President/Head of Energy Research, Ecobank, Mr. Dolapo Oni, believes the NLNG remains the best way the country has monetised its gas reserves, saying it had at many times come to the rescue of the Federal Government in terms of provision of cash.
Nigeria is blessed with abundant reserves of associated and non-associated gas, estimated to be in excess of 180 trillion cubic feet.
Oni said, “I honestly think we’re making a big mistake with this amendment. This move to impose new costs and payments on the company’s cash flows will not only affect the bottom line but future investment prospects. Amending the agreement after the investments have been made is akin to changing the goal post during the match.
“You send a bad signal to the international investing community. The timing is also wrong – just as the shareholders are currently coordinating which gas projects will be involved in Trains 7 and 8. If they wish to impose the new levies on the future trains, then the investors have a clear line of sight on what incomes will be, not on existing investments.”
With six trains currently operational, the NLNG is capable of producing 22 metric million tonnes per annum of the LNG, and 5mtpa of natural gas liquids from 3.5 billion standard cubic feet per day of natural gas intake.
The Managing Director of Nigeria LNG, Mr. Tony Attah, said the amendment could “only be a direct attack on government’s Ease of Doing Business Agenda and determination to attract direct foreign investment,” which will not flow into “where contracts and agreements are flagrantly violated as is imminent in this instance.”