“The delay in the passage of the Petroleum Industry Bill, PIB, is one of the major hindrances to the progress of the project.”
The long delay in the passage into law of the draft Petroleum Industry Bill, PIB, by the National Assembly is posing serious setback to the construction of Train 7 project of the Nigerian Liquefied Natural Gas, NLNG, an official has said.
The Managing Director, NLNG, Babs Omotowa, said at the launching of the NLNG “Facts and Figures”, in Lagos, that the company was still fully committed to the completion of the project despite the setback.
As a demonstration of the commitment, Mr. Omotowa said the company was currently carrying out some pre-final investment decision, FID, works expected to be completed soon.
“The delay in the passage of the Petroleum Industry Bill, PIB, is one of the major hindrances to the progress of the project,” he said.
According to him, the gas suppliers consider the legislative framework in the PIB to make their business decisions.
He said if the law was not passed it was also posing a major financial challenge to buyers of Nigeria’s natural gas abroad who would want issues bordering on gas prices and sales/purchase terms sorted out before making final commitments to buy.
Mr. Omotowa used the occasion to review the benefits of the NLNG project to the Nigerian economy.
He said the company has so far paid to its shareholders over N2 trillion in dividends from the sale of liquefied natural gas.
The company’s operations, he stated, has also helped Nigeria in realizing its national objective of reducing substantially the level of gas flaring in the country.
The Minister of Petroleum Resources, Diezani Alison-Madueke said recently that the Nigerian National Petroleum Corporation, NNPC and its subsidiaries have in recent years reduced the level gas flaring from 30 per cent to about 11 per cent
Mr. Omotowa said the NNLG has made enormous impact in the socio-economic growth of Nigeria over the years, saying its major aspiration in the near future was to control at least 10 per cent of the total global gas market share
According to Mr. Omotowa, the breakdown of the total revenue generated by the NLNG showed that Federal Government took about 70 per cent, comprising the 49 per cent dividend, 30 per cent company income tax, CIT and other taxes.
On efforts to diversify the country’s revenue base and monetise the gas resources, Mr. Omotowa said Nigeria now owns $14 billion (N2.2 trillion) of asset on Bonny Island; about $13 billion (N2 trillion) in dividends, $11 billion (N1.7 trillion) earned in feed gas sales revenue, and over $10 billion expenditure in local economy on goods, services and salaries of thousands of staff employed.
“Corporate income tax of over N200 billion is paid yearly. Rivers State government earns over N6 billion yearly from personal income taxes; Bonny local council earned over N88 million yearly as tenement rate, among others,” he said.
The company, he said, has supplied over 3,000 cargoes of LNG to the world since it began operations, in addition to drastically reducing gas flaring since inception.
“Over four trillion cubic feet (tcf) of associated gas, which would have been flared, has been captured, thus helping to reduce gas flaring by upstream companies from over 60 per cent to 11 per cent.” he said.