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Nigeria Lags Behind as Mozambique Attracts $7bn

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  • Nigeria Lags Behind as Mozambique Attracts $7bn

While several liquefied natural gas projects in Nigeria continue to suffer from lack of final investment decision by shareholders, Italian oil giant, Eni, and others have signed off on a $7bn investment to export natural gas from Mozambique.

Eni is a shareholder in two of Nigeria’s LNG projects that have been unable to secure FID from the shareholders since 2007.

The company holds 17 per cent equity participation in Brass LNG project and 10.4 per cent in the Nigeria LNG Limited, which has been struggling to develop its proposed Train 7 project.

The US-based ConocoPhillips exited Brass LNG in 2013, after British Gas opted out of another project, Olokola LNG in 2012, followed by Shell and Chevron.

Industry experts have described the Mozambique’s LNG plant as a threat to Nigeria’s market share in the global gas market.

Once built, the Floating LNG plant with a capacity of about 3.4 million tons per year, described as the first FLNG in Africa and the third globally, will draw gas from the Rovuma Basin where Eni made its first major Mozambique find in 2011.

According to the Chief Executive Officer, Eni, Claudio Descalzi, $6bn has been secured in financing from 15 banks, while the remaining amount will be financed by the shareholders.

BP Plc has a 20-year contract to buy all the LNG production from the plant, with first gas production expected in 2022.

The founder and Chief Executive officer, GasInvest Limited, Mr. David Ige, told our correspondent that Nigeria’s market share in the global market had continued to drop as new entrants entered the market, stressing the need for new LNG projects such as Brass and Train 7.

According to the former group executive director of gas and power at the Nigerian National Petroleum Corporation, the country’s aspiration in the LNG market is to maintain focus on high-value exports and strive within that framework for about a 10 per cent of global market share.

He said, “While the delay in the FID of the LNG projects is regrettable, it is essential that decisions be made in a balanced manner.”

Ige described the delay in the current LNG projects as undesirable, saying, “It weakens our short-term market share aspiration.

“However, this is not a permanent loss as global demand will continue to grow and if we assure competitiveness of our supply, we will always be able to re-enter the market.”

The President, Nigerian Association of Energy Economics, Prof. Wumi Iledare, said, “The Mozambique LNG plant threatens NLNG market share within the context of the current LNG soft market.

“Regarding Brass LNG FID, Nigeria missed the opportunity. You can blame it more on the dilly-dallying with the Petroleum Industry Bill. The PIB stayed too long on the political stage and created significant industry uncertainty with higher project exposure to failure.”

Iledare added that the downward spiral in oil prices created low LNG product price, making the Brass LNG investment to wobble.

A former NNPC board member, and ex-Project Director for the Uquo gas field development, Alhaji Abdullahi Bukar, said, “The Mozambique plant will affect Nigeria seriously in the sense that we have more competition. Normally, we have long-term contracts. The ones that are going to be renewed in the next few years will face a very stiff competition.

“This is just the first one; there are other LNG schemes that are coming out from East Africa.”

The Group Managing Director, NNPC, Dr. Maikanti Baru, said in March that a lot of money had been spent on the Brass LNG project.

He said the FID was planned for 2012 but the shareholders were unable to secure the market due to new plants in East Africa and other developments in the industry.

“What the shareholders in Brass LNG are doing now is to redesign the plant and secure a market because without the market the project cannot go on,” Baru said.

He said the Federal Government would do everything to ensure the take-off of NLNG’s Train 7 and Brass LNG in the months ahead after which the Olokola LNG would come on board if the fundamentals were strong.

The NNPC GMD stated that the corporation was refocusing on the Brass LNG and rebuilding the confidence of investors on the project after the exit of ConocoPhillips a few years ago, adding that the country would gain a lot from t he project in terms of taxes, royalties and profits.

Baru, however, noted that the long delay in the passage of the PIB had led to uncertainty in the fiscal terms, while the recent move by the National Assembly to amend the NLNG Act had also dampened the optimism of investors in the industry.

“The review of the NLNG Act by the National Assembly is causing a challenge for the Federal Government and the IOCs and it is sending wrong signals to the international community about how business is done in the country,” Baru added.

Last month, 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, 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.

It described the amendment as a threat to the company’s continued existence, saying it would discourage inflow of foreign investment.

With six trains currently operational, the NLNG is capable of producing 22 metric million tonnes per annum of LNG, and 5mtpa of natural gas liquids from 3.5 billion standard cubic feet per day of natural gas intake.

The company said the Train 7, which would lift the total production capacity to 30mtpa, was progressing with some preliminary early site preparation work initiated.

The NLNG added that further work awaited the FID by the stakeholders.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Senate Summons NICON, AIICO, Others Over N17.4bn Pension Remittances

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The Senate Public Accounts Committee has summoned the management of the NICON Insurance Plc, AIICO Insurance and other insurance companies over their alleged failure to remit N17.4bn pension fund to the Pension Transitional Arrangement Directorate.

The Senate hinged the summon on the 2016 report of the Auditor-General for the Federation which unraveled the alleged non-remittance of N17.4bn pension fund to PTAD.

Appearing before the panel on Monday, the Executive Secretary of PTAD, Dr Chioma Ejikeme, informed the lawmakers that PTAD took over the assets and liabilities of the defunct pension offices without a formal handing over.

She said, “On taking over, the directorate wrote all underwriters to make returns and remit whatever amount that was in their custody into a CBN dedicated account.

“Some of the underwriters responded to the request while some did not.

“The bank certificate of balances, accounting statements, three years financial statements and policy files requested by the federal auditor were not handed over to PTAD at the time of consolidation.

“It is worthy to note that we discovered that N17.4bn which comprised of cash, securities and properties from the nine insurance underwriters was unremitted as a result of the letter PTAD sent to them.

“These figures represent the claims by the underwriters with regards to their indebtedness.

“In order to ascertain the true position of legacy funds in custody of underwriters, the directorate appointed a consultant in 2018 who carried out forensic audit of nine out the 12 insurance underwriters and produced a final report on the recovery of the legacy funds and assets for PTAD.”

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Sterling Homes Plans To Reduce Housing Deficit

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Sterling Homes Limited has said it is committed to working with the government through private public partnership to reduce housing deficit in all the geo-political zones in the country.

The Managing Director, Mr Kunle Adeyemi, said this during an event on the company’s rebranding organised as part of its 10th year anniversary in Lagos on Friday.

During the event, the company while expressing commitment to excellence and customer satisfaction, unveiled its new logo with colours to define its mission and objections.

We want to be present in all the six geo-political zones on Nigeria by providing affordable luxury homes, excellent torch. So for us, there is a need for us to rebrand and have a new direction and vision.

“We want to partner with the government on the present housing deficit; we want to embrace a public, private partnership with the government to reduce the deficit in every geo-political zone.”

The managing director said that one of its unique selling points was its after sales services which was top notch.

He said it ensured that its customers were taken through the journey of actualising their dreams of becoming home owners.

While noting that everyone deserved to have a comfortable home despite the economic situation, he said it had designed a structure payment plan with zero interest in some cases to help intending home owners.

He said it also had provisions for high breed options and developing areas to accommodate various income levels.

Before the end of the year, he said, Sterling Homes would be establishing new presence and projects in other regions.

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Mutual Benefits Drives Financial Inclusion

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Mutual Benefits Assurance Plc says it is committed to deepening financial inclusion and creating easy accessibility for insurance in the country.

A statement from the firm on Friday said it expressed this commitment when it inaugurated its South-West region franchise operations in Ibadan, Oyo State.

The Managing Director, Mr Femi Asenuga, said this was part of its efforts to develop the insurance business and create values.

He said, “The role we all have to play is to be ambassadors of Mutual Benefits.

“A franchise is a well-known word and the way Mutual Benefits practices franchise is in our normal style of creating and adding value; we never rest.”

Asenuga said that the firm was working with stakeholders to increase awareness and take its message to the grassroots.

In developed economies, he said, insurance firms owned banks. He regretted that this was not the situation in Nigeria.

He said the firm would provide stakeholders with the platform and support to make them excel as a member.

The Managing Director, Mutual Benefits Life Assurance Limited, Mr Ademola Ifagbayi, appreciated the stakeholders and urged them to take advantage of the franchise.

The Group Managing Director, Odua Group, Mr Adewale Raji, in his address, advised stakeholders to be committed and showcase good character and integrity.

He said, “The Odua investment is owned by the six South-West governments and it is in our interest when economic, businesses and investment spreads across the South-West states.

“This is an opportunity for us to strengthen insurance penetration within the South-West states.”

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