Based on some media reports there is uneasy calm at the headquarters of the Nigeria Liquefied Natural Gas (NLNG), the state-controlled liquefied natural gas (LNG) company, over the lifting concession given to IOC shareholders over others.
There have been changes in the Board of the Nigerian LNG, as Total asked its representative Patrick Olinma, a former Executive Director to proceed on immediate retirement, under controversial circumstances, a replacement is yet to be announced by Total.
It is reported Olinma’s exit from Total was greeted with jubilation within Total Nigeria and NLNG.
Olinma, who was once a General Manager in charge of commercial unit of NLNG, joined the NLNG board in the second quarter of 2020. Also, Mohammed Abdulkabir the new Group Executive Gas and Power of NNPC, will join the board of NLNG, as the new NNPC representative.
Findings have shown that the Economic and Financial Crime Commission (EFCC) maybe carrying out its own investigation on this matter, in light of President Buhari execution of the PIA, and to ensure Nigeria is not short-changed.
NLNG, which is 49% owned by the federal government through the Nigerian National Petroleum Corporation (NNPC), has IOC shareholders including Shell Gas B.V which owns 25.6%, Total LNG Nigeria which owns 15% and Eni International, which owns 10.4%.
The NLNG operates an “equity lifting” project in which its joint venture partners — Shell, Total and Eni — have an obligation to off-take, transport and market the LNG cargoes.
However, a report by The Nation Newspaper has it that the IOC shareholders who are responsible for the failure of gas supply are given favorable lifting terms over others leading to a series of deferrals, defaults and cancellation, creating an in-house crisis and market tension for the NLNG. In simple terms, it implies that the IOC shareholders abandon cargoes to others when the market is weak and ensure they take all volumes when market gets stronger, at lower purchase values from NLNG. It is reported that the government of Nigeria is exposed to losses due to this sharp practice.
According to a source at the NLNG, more than 20 LNG cargoes have suffered deferrals despite demand surge in the international market, and the number could rise to 50 cargoes by December if there are no adjustments made. There are concerns that the deferrals and defaults could malign the reputation of the Nigerian LNG company among international markets as the lopsidedness in responding to market demands are making some important customers look elsewhere.
According to a news report by The Cable, Naturgy, a Spanish multinational natural gas and electric company, recently levelled allegations of discriminatory/antitrust practices against NLNG IOC shareholders, accusing them of sharp practices, it seems it was in NLNG interest to settle matters due to reputational risk, perception of corruption and exposure of the IOC shareholders to International jurisdiction investigations.
However, when Blueprint Newspapers contacted the image maker of NLNG, Anne Marie, on phone for a reaction, she promised to get back at the reporter. But as at the time of filling this report she did not respond.
