NLNG reiterates commitment to Nigeria despite challenges

Nigeria Liquefied Natural Gas (NLNG) Ltd has reiterated its commitment to Nigerian oil and gas sector development despite challenges caused by the Nigerian Maritime Administration and Safety Agency (NIMASA).

Reacting to a recent judgment of the Court of Appeal directing that the case between the two parties be remitted to the Federal High Court for a rehearing, the company stated that spite of these challenges, NLNG continues to live up to its name and vision of “being a global company, helping to build a better Nigeria.

“NLNG remains a good and responsible corporate citizen, committed to conducting its business in accordance with the laws of the Federal Republic of Nigeria, and abides with all applicable laws including those that confer exemptions on and grant fiscal/other incentives to businesses, as a way of sustaining its operations and growing the economy. By doing so, NLNG has recorded several feats in helping to build a better Nigeria.

“NLNG has monetised over 6.37 Trillion Cubic Feet of Associated Gas to Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs), thus helping to reduce gas flaring by upstream companies from over 60% to well under 20%.

“From the monetisation of gas hitherto being flared, NLNG has generated over $100 billion revenue since inception; paid over $36 billion to Shareholders as dividends, of which 49% of that total has gone to the Federal Government by virtue of its shareholding stake.

“$28 billion paid to Joint Ventures (JVs), feedgas suppliers. 55% to 60% of that amount has gone to the Federal Government courtesy of its stake in the JVs. NLNG is by far the highest individual payer of Companies Income Tax in Nigeria. In 2018, the company’s corporate income tax paid to the Federal Government amounted to about $864 million, over 40% of what was paid in 2017.”

It would be recalled that on 3rd May 2013, at about 4.20pm, a tug boat blockaded at the instance of NIMASA acting through Global West Vessel Specialists Limited, LNG Adamawa, an NLNG chartered vessel.

The blockade was a self-help effort to extract levies purportedly owed NIMASA by NLNG. According to NIMASA, these include shipping levies based on gross freight on exports and imports.

The NLNG Act exempts NLNG from payment of the Sea Protection Levy, the 3% freight levies on cargo exports shipped by NLNG, and the 2% Cabotage Levy. NIMASA eventually lifted the blockade on 5th May 2013 after a meeting between the management of NLNG and NIMASA, in which it was resolved for lasting solutions to be sought under the rule of law.

On 21st June 2013, NIMASA effected another illegal blockade of the Bonny Channel, preventing NLNG vessels and vessels belonging to its buyers from accessing or leaving the NLNG terminal.

After a three week illegal blockade, during which NLNG was compelled to start making the disputed payments “under protest”, NIMASA ended the illegal blockade. Owing to the illegal blockade which persisted in spite of court orders, NLNG lost revenues of over $355 million.