NIMASA blocks Nigeria LNG vessels again as debt crisis deepens

NIMASA says its blockade of the Bonny River channel and detention of the vessels are law enforcement actions following the refusal of NLNG to stick to the agreements reached over the pending issues.

The lingering crisis between the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria Liquefied Natural Gas Company  over alleged refusal to pay statutory charges and levies deepened on Saturday, as NIMASA allegedly defied a restraining court order to again disrupt NLNG operations in Bonny Island.

NIMASA had on May 3 triggered a major trade dispute against NLNG in Bonny Island, blocking access to the company’s major loading terminals for gas exports following the gas company’s alleged refusal to pay the statutory three per cent freight levy on every ship entering or leaving the country’s territorial waters.

The agency’s Acting Director, Shipping Development, Waredi Enisuoh, had accused the NLNG of cherry-picking the laws it obeys, alleging that the company refused to meet its obligations despite all efforts to get it to do so.

Following the incident, NLNG’s General Manager, External Relations, Kudo Eresia-Eke, said a series of meetings, were held between the two bodies, culminating in his company’s decision to pay, under protest, $20million (about N3.2 billion) into NIMASA’s designated account for the settlement of the disputed accumulated levies. 

According to Mr. Eresia-Eke, the payment was without prejudice to NLNG’s  right to ask the Federal High Court, Lagos, to offer judicial clarification on the issues involved in the crisis, as a way of finding a lasting resolution.

Despite the payment, and with hearing in the case scheduled for next Monday, Mr. Eresia-Eke said NIMASA, in flagrant disregard of the court injunction issued by the Federal High Court in Lagos, not only blocked the Bonny River Channel to deny some of its vessels access, but also issued a detention order against three of its ships, barring them from accessing the loading bay.

At  5:20 p.m. Friday, June 21,  two NIMASA boats, with 15 naval officers on board, ordered that one NLNG vessel, LNG Imo, and one chartered vessel, Torm Thames, remain at NLNG’s loading bay, whilst another NLNG Vessel, LNG Oyo, remains outside the Bonny Channel until further notice, Mr. Eresia-Eke said in a statement Saturday.

NIMASA, he said,  subsequently issued Ship Detention Orders on June 22  (Saturday) detaining three NLNG ships (LNG Enugu, LNG Oyo, LNG Imo) and barring them from accessing or leaving the Companys loading bay.

The NLNG says these developments are in flagrant disregard of the court injunction issued by the Federal High Court in Lagos in Suit No FHC/L/CS/847/2013.  

Justice M.B. Idris,  had on June 18, issued an order against the Attorney General of the Federation, Global West, and any other parties, including NIMASA, from imposing any charges or taking any steps to block, detain or prevent access by the company-owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria.

Mr. Eresia-Eke had on Tuesday blamed the protracted dispute between his company and NIMASA on the perceived conflict in the provisions of the  laws regulating the operations of the two government institutions, namely the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act, and the Nigerian Maritime Administration and Safety Agency Act, Merchant Shipping Act and Coastal and Inland Shipping Act.

While NIMASA insists all companies doing business within Nigeria’s territorial waters, including the NLNG, must pay levies, the NLNG claims the provisions of the NLNG Act exempts it from paying to NIMASA Sea Protection levy, three per cent freight levies on cargo exports shipped by NLNG, and two per cent cabotage levy on LNG carriers.

Industry insiders say the implications of the current face-off between the two organisations are enormous and will impact negatively on  international LNG buyers, the international financial market, Nigeria (to which NLNG contributes four per centof the country’s GDP) its shareholders and the investment climate in Nigeria. They also believe the crisis may adversely affect  Nigeria’s image within the international investment community.

However, NIMASA, in its reaction to NLNG’s statement on Saturday, denied any knowledge of any court order or any suit brought by NLNG against the performance of its statutory functions.

NIMASA’s Deputy Director/Head, Public Relations, Isichie Osamgbi, said its blockade of the Bonny River channel and detention of the vessels belonging to or chartered by the NLNG were law enforcement actions,  following the refusal of the company to abide by the terms of negotiated agreement over the pending issues.

“The Nigerian Maritime Administration and Safety Agency (NIMASA), has today, in its enforcement of Nigerian laws, served detention notices/orders on vessels belonging to/chartered by the Nigerian Liquefied Natural Gas Company Limited (NLNG),” Mr. Osamgbi said.

He added, “This course of action was forced on NIMASA by the NLNG’s subsequent refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to, after reaching agreement with NIMASA on its outstanding debt and paying US$20m out of it and its continued flagrant disregard for Nigerian laws.

“Contrary to NLNG’s position, NIMASA is not aware of any court order against it or any suit brought by NLNG against NIMASA.

“By its action, the NLNG has trivialized the mediation process and the position of the Federal Government of Nigeria whose Nigerian National Petroleum Corporation owns and holds 49 per cent of the shares in NLNG and which endorsed the agreement reached that NLNG should pay its taxes/levies and observe all its obligations under the laws of Nigeria in which it is operating.”