‘Amendment to Nigeria LNG Act will lead to double taxation’

The Nigeria LNG Limited (NLNG), has warned that any amendments to the NLNG Act would lead to double taxation considering that gas suppliers to NLNG already pay the Niger Delta Development Commission (NDDC) 3 per cent levy.

General Manager, Production, NLNG, Mr. Tayo Oginni, stated this while briefing international media correspondents and the Managing Director of the News Agency of Nigeria (NAN), Mr. Bayo Onanuga, during a plant facility visit to NLNG in Bonny, Rivers State.

He argued that the development was inimical to the progress of the oil and gas industry, especially when the country should be developing its vast gas resources and attracting Foreign Direct Investments (FDIs) into the country.

Oginni said that after nearly 30 years of false and half attempts to start the LNG project in Nigeria, it was the enactment of the NLNG Act that made it possible for NLNG to be established and subsequently for Final Investment Decisions (FIDs) to be taken for all six trains.

“And this earned the country the reputation of the fast growing LNG project in the world. He added that the milestone would be watered down by attempts to change the rules of the game built into the Act,’’ he said.

Recounting his experience with the NLNG project, he said the loss of hope experienced prior to the incorporation of NLNG is again manifesting itself in NLNG’s bid to expand its production facility with Trains 7 and 8 as a result of lack of investment in the upstream sector to guarantee gas supplies. He called on the Federal Government to preserve the sanctity of agreement in the NLNG Act and pass the Petroleum Industry Bill (PIB) to spur exponential growth in the oil and gas industry in the country.

“The NLNG Fiscal Incentives, Guarantees and Assurances Act (NLNG Act) allowed investments to flow into the country. It provided investors the confidence that any agreement entered into would be respected and preserved. To amend the Act will not help Nigeria, NLNG and its hopes for expansion. It will erode investors’ confidence that the Act provided in the first place,” he added.

He pointed out that the imminent requirement of over $1 billion investment every year in the upstream for the next few years in order to guarantee steady gas supply just to ensure that NLNG’s Trains 1 – 6 can be kept full over the contracted life of the plant will be impossible with the amendment.

“It will also mean an immediate loss of foreign investment of $25 billion in respect of Trains 7 and 8 investment ($15 billion by the upstream and $10 billion for construction). This will also cost the Niger Delta region and the country about 18,000 jobs required for the construction activities of the new trains,” he said.

Commenting on the achievements by NLNG, he stated that the company has generated $90 billion in revenues as at 2015, paid $5.7 billion in taxes as well as committed more than $200 million to corporate social responsibility projects in the Niger Delta, especially in the areas of capacity building and infrastructure development.

He said the company was also to commit some ₦60 billion to see the Bonny-Bodo Road come into reality and commit ₦3 billion annually for the next 25 years to transform Bonny into a Dubai of sorts.

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