Anxiety as funds inflow to gas, LNG sectors shrink, NLNG MD cries out at summit
Startling revelations have continued to emerge from the just concluded 2017 Nigeria Oil and Gas Strategic Conference and International Exhibition in Abuja.
The latest coming from the Managing Director of the Nigerian LNG Limited, Mr. Tony Attah, showed observable drop in the level of investments in gas and the Liquefied Natural Gas.
While noting that the planned amendment to the NLNG Act poses further threat, he said chances for economic and industrial growth would be dashed if inhibitors such as the removal of legislative frameworks like the Nigeria LNG Limited Fiscal Incentives, Guarantees and Assurances Act, were permitted in the Nigerian gas industry.
Speaking on the topic; ‘Nigeria’s Gas Sector – The Catalyst for Economic and Industrial Growth,’ a statement issued by the company quoted him as saying “It is time for gas. We need deliberate decisions and policies to decouple oil from gas and attract investment. We need to do that now. Investments in the gas and the LNG industry are declining”.
“It is already difficult as things stand; to find foreign direct investment and growth in the gas industry has been cautious after the recent downbeat global crude oil price. In addition to this, Nigeria is ranked 167 of 189 countries in the ease of doing business index.”
Hinting on the likelihood of increased gas demand, Attah made it clear that “if we continue with the self-inflicted barriers in our gas industry, we might miss the opportunity to make this country a major player in the global energy mix.”
Attah who called for more creative incentives capable of attracting investments and preservation of the sanctity of contracts and agreements, said, “Take Nigeria LNG, for instance, only recently, the House of Representatives began moves to amend the NLNG Fiscal Incentives, Guarantees and Assurances Act, a key enabler responsible for the success of the company. The NLNG is a successful Nigerian company, with an asset base of $11bn as well as the fourth largest LNG plant in the world”.
“The amendment will result in immediate loss of investor confidence. This is especially pertinent in view of the imminent requirement of over $1bn investment every year in the upstream for the next few years in order to guarantee steady gas supply just to ensure that the NLNG’s Trains 1 – 6 can be kept full over the contracted life of the plant.
“If shareholder confidence is negatively impacted, it would mean that those funds will not be forthcoming, and this will clearly constrain even the basic survival of the NLNG’s current operations and Nigeria’s opportunity for gas development.”
Attah who used the opportunity to give a brief rundown of his account of stewardship revealed that the company has generated $90bn in revenues as of 2015, paid $5.7bn in taxes as well as committed more than $200m to corporate social responsibility projects, especially in the areas of capacity building and infrastructure development.
The international conference which attracted big oil experts like the Secretary General of organization of Oil Exporting Countries (OPEC), Dr. Mohamed Barikindo ended Thursday in Abuja.
