The Managing Director and Chief Executive Officer of Nigeria LNG Limited (NLNG), Tony Attah, has again cautioned that government would end up losing$1.3 billion on annual basis if the legislature succeeds in amending the Act establishing the company.
At the public presentation of its Facts and Figures on NLNG 2017 publication, a compendium of the NLNG business, Attah stated that, “The Nigeria LNG Limited (NLNG) Fiscal Incentives Guarantees and Assurances Act (NLNG Act) allowed investments to flow into the country”.
According to him, It provided investors the confidence that any agreement entered into would be respected and preserved, and therefore warned that to amend the Act will not help Nigeria in developing its vast gas resources, NLNG and its hopes for expansion.
Rather the action will erode investors’ confidence that the Act provided in the first place, he stressed.
Attah said during his presentation that Nigeria has the makings of a top quartile gas producing country, with potential to develop into a global gas powerhouse and increase its LNG market share, adding that the right business environment needed to exist for that transformation to come about.
He remarked that identified opportunities like the expansion of NLNG’s Bonny Island Plant with Trains 7 and 8 could be a catalyst to unleashing the country’s gas potentials, as time is rife for Nigeria to use gas to spur industrial and economic transformation.
He further noted that some challenges may slow down progress towards achieving the country’s dreams, citing the proposed amendment of the Nigeria LNG Limited (NLNG) Fiscal Incentives, Guarantees and Assurances Act (NLNG Act) by the House of Representatives as a potential show-stopper.
“If the amendment is passed, the NLNG expansion project will be jeopardised and Nigeria will lose investments of US$ 1-3 billion annually in the Upstream to enable NLNG maintain current production capacity and gas developments. It means an immediate loss of foreign investment totalling US$25 billion in respect of Train 7 and 8 investments.
Another impact will be the potential loss of about 18,000 jobs required for the construction activities of the Trains.
“An amendment or change in the NLNG Act portrays Nigeria as a promise-breaker and untrustworthy, damaging the country’s reputation and hamstringing its ability to attract foreign investment,” he pointed out.
Citing the Qatari example, Attah said “Qatar started to ship LNG in 1997, two years before Nigeria. But you have to be awed by what the country has achieved since then. Today, oil and gas, and principally LNG is the foundation of Qatar’s economy; and account for more than 70 per cent of total government revenue, and more than 60 per cent of GDP, as well as roughly 85 per cent of export earnings.
Qatar has LNG capacity of about 77MTPA, and generates revenues of about $91 billion per year. Gas was the catalyst for transformation of a small emirate to a global economic powerhouse. This will give you a feeling of what can happen when you focus on gas.”