Nigeria LNG Limited’s (NLNG) has described as incorrect and a misrepresentation of the correct state of affairs of the company and its operations recent media reports allegedly linking the company’s operations to gas flaring and pollution in the Niger Delta.
According to a statement by Kudo Eresia-Eke, General Manager, External Relations Division of NLNG, the incorrect reports go on to mention a proposed amendment of the NLNG Act aimed at redressing what was termed injustice that NLNG has meted out to the people of the Niger Delta region.
The statement went on to state some key facts to set the records straight:
1). NLNG was incorporated as a private limited liability company in 1989 but only commenced production operation in 1999. It has thus been in operation for only 17 years, not 27 years as claimed by the erroneous report.
2). NLNG does not explore or produce gas but rather buys gas which it then liquefies i.e. converting it from gas to liquid. The company therefore does not routinely flare gas from its operations.
3). Rather, NLNG remains the nation’s boldest and most successful attempt at minimizing gas flaring in the Niger Delta. It has in fact greatly helped to reduce gas flaring from about 65% before its establishment, to today’s level of about 20%. The company has thus prevented over 4.7Tcf (Trillion cubic feet of gas) of Associated Gas from being flared. Simply put, NLNG converts gas historically flared, erstwhile waste and pernicious nuisance to wealth/revenue for the nation.
4. In addition, NLNG has since 2007 made available over 150,000 MT LPG (cooking gas) per year to Nigerians and as a result has helped to reduce the price of cooking gas by 50% and stabilized the supply. This has helped ameliorate the environmental implication of using wood for cooking, and of course the obvious erosion and desertification problems resulting therefrom. Furthermore NLNG, is in addition, now working with others to increase the usage of LPG to 2million MT for even greater improvement of the environment.
The statement pointed out that the NLNG has remained a responsible corporate citizen and continues to contribute significantly to the Niger Delta as evidenced by the following examples out of many:
a) Built, equipped and sponsors the City and Guilds of London and Nigeria Board for Technical Education accredited Vocational College in Bonny Island in the Niger Delta.
b) Funded the construction and equipping of $2million Engineering Faculty in University of Port Harcourt.
c) Generates N6 billion annually in taxes to the Rivers State Government.
d) Generates N140 million annually as tenement rates to Bonny Local Government Council.
e). Provides 24hrs electricity, piped water supply and paved roads in Bonny in the Niger Delta
f). Constructed roads, schools and Health Centres in Rumuji, Ubeta and several other communities in the Niger Delta
g). Provides Post Primary, Undergraduate and Post graduate scholarships to over 3,000 students from the Niger Delta
h). Intervened in several health programmes in the Niger Delta
i) . To ensure execution, recently offered to provide 50% of cost of Bodo-Bonny Road, a government project that has lingered now for decades, expected to connect several important Niger Delta communities including Ogoni, Andoni and Bonny.
On the proposal to review the NLNG Act, the statement said that the company will like to provide the following clarifications:
I). The NLNG Act has been a key enabler that has allowed the Government of Nigeria to earn over $33billion from its initial investment of $2.5billion.
II). During the first 5-years of the 10-year Company Income Tax holiday in the NLNG Act, none of the shareholders received any dividend payment and all the profits generated were reinvested which enabled the company to grow from the original 2-Trains to 6-Trains and to also own/operate 23 LNG ships without any additional investment by the Government of Nigeria. These investments are now worth over $19billion.
III). The issue of the NDDC Act and NLNG Act have been subject of Federal High Court and Court of Appeal decisions, both of which were decided in favor of NLNG Act, and NDDC’s application to further appeal to the Supreme Court was dismissed. For such to be termed as injustice is an irony.
IV) In comparison with the NLNG Act, more generous tax incentive schemes currently exist in the Export Free Trade Zones in Nigeria where participants are granted absolute exemption from all forms of taxes and levies by any level of government, in perpetuity, and several well-known corporations in the country are currently investing in these zones. The exemptions granted to these export oriented companies (of which NLNG is also one) are geared to make these companies compete favorably globally so as to earn for the country much needed revenue and foreign exchange.
V). NLNG Act, an act of parliament, includes assurances and guarantee promised by the Government of Nigeria for the duration of the project life, and these assurances were further confirmed to international investors by (a) the Attorney General of Federation (b) the Minister of Finance (c) the CBN Governor, before the international investors agreed to bring in the several billions of dollars investment which enabled the project to start, grow and be the success it is today. This assurance of stability is what gave the investors the comfort to invest their money and Nigeria has always been a country that keeps its words.
VI). The Government of Nigeria currently receives over 70% of the profits from NLNG due to the additional revenues paid to the Government of Nigeria as taxes, etc, despite its shareholding being only 49%.
The statement said further that what Nigeria needs to do is to grow industries (“grow the cake”) to earn more revenue and add value to Nigeria, rather than put in jeopardy one of Nigeria’s most successful companies, stressing that “NLNG wishes to emphasise that it continues to conduct all its businesses in full compliance with existing regulations and the laws of the Federal Republic of Nigeria.”
