NLNG Opposes Proposed Amendment to Establishment Act

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Nigeria Liquefied Natural Gas Limited (NLNG) on Thursday at a public hearing organised by the House of Representatives Committee on Gas Resources opposed the proposed amendment of its Act by the National Assembly and restated its commitment to the development of the Niger Delta, as well as willingness to partner government agencies, including the Niger Delta Development Commission (NDDC), to develop the region.

At the public hearing on a bill to amend the NLNG Act, the Managing Director of the company, Mr. Babs Omotowa, was quoted in a statement by the company’s General Manager, External Relations, Dr. Kudo Eresia-Eke, as saying that this was why NLNG is easily one of the biggest promoters of corporate social responsibility in the area, supporting education, infrastructure development, and entrepreneurship.

“As evidence of our commitment to the development of the Niger Delta, NLNG has spent $177 million in the areas of infrastructure and education in the region. So it is not an issue of reluctance to support Niger Delta, but one of ensuring we work within the confines of the law and honour agreements and promises to maintain the valued reputation of our country in international business,” Omotowa said.

The NLNG boss noted that NLNG needs to be in the position to continue to support the region through being a successful Nigerian company, bringing value to the region and the nation in general, but that this would only be possible if the promises made to investors are not broken by amending the NLNG Act, which would certainly portray the country as one that does not honour agreements.
He emphasised that keeping agreements entered into with investors was crucial to retaining and attracting foreign investment into NLNG as well as other sectors of the economy in line with the drive of the current administration.

“The intervention of NLNG, more than any other single factor, has led to the progressive decline in Nigeria’s gas flaring profile over the years, from well over 65 per cent in the 1990s, to less than 20 per cent today. Therefore, aside from the fact that the company is earning revenue for the federal government and its other shareholders, it is cleaning up the Niger Delta environment in the process. It goes without saying the NLNG Act has been pivotal to the commencement of the project in the first place, and for the huge success the company has represented for Nigeria, with the country reaping over US$33billion from its initial investment of $2.5billion. The Act enabled the company to grow from its original 2-Trains to 6-Trains, creating an asset base of $19 billion,49 per cent of which the federal government owns.”

He clarified that: “Incentives which have been granted to NLNG are not peculiar to Nigeria. They were granted to encourage investments in gas utilisation to reduce flaring which had become a major problem for the country. Examples of similar incentive initiatives abound in Angola (12 years), Oman, Malaysia, Qatar and Trinidad (up to 10 years). Other more generous incentive schemes also exist in Nigeria, in the Free Trade Zones.”

He remarked the current amendment effort is most unusual as it attempts to enforce the payment of a levy from which an entity is expressly exempted by a valid and subsisting legislation in which the Federal Government of Nigeria gave unequivocal undertakings and declarations that induced significant investments.

“As far as we are aware, this is the first time in the history of legislative practice in Nigeria that a proposal is being made to amend a law for the sole purpose of imposing a levy against a company for the benefit of an agency of government. We urge the Honourable Committee not to lend itself to the establishment of an unjust precedent. To do otherwise would be to encourage other agencies of government who fail to make their case in judicial proceedings in court, to resort to legislative engineering to achieve what they failed to obtain in court,” he said.