- Investments in Gas, LNG Declining – NLNG MD
The Managing Director of the Nigerian LNG Limited, Mr. Tony Attah, has said investments in gas and the Liquefied Natural Gas are declining, and the proposed amendment to the NLNG Act poses further threat.
Attah spoke at the 2017 Nigeria Oil and Gas Strategic Conference and International Exhibition in Abuja entitled: ‘Nigeria’s Gas Sector – The Catalyst for Economic and Industrial Growth’ according to a statement from the company on Wednesday.
He said hopes 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.
Attah said, “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.”
He noted that experts had maintained that there was a strong likelihood of increased gas demand, saying, “However, 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.”
The NLNG MD stressed the need for the country to be creative with incentives that would attract investments and preserve the sanctity of contracts and agreements.
He 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.
According to Attah, 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.
He said, “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.”