Blockade of export from Bonny Island for 22-day cost NLNG $475m

The past Managing Director and Chief Executive Officer, Nigeria Liquefied Natural Gas Limited (NLNG), Babs Omotowa, yesterday revealed that NLNG lost $475 million when Nigerian Maritime And Safety Agency, NIMASA, blocked its export from Bonny Island for 22 days.

Omotowa, however, expressed delight over the ruling of the Federal High Court, vindicating his company, but noted it would not restore the huge loss.

“Unfortunately, the victory will not restore NLNG’s $475 million loss arising from NIMASA’s blockade of NLNG ships in 2013, as 65 per cent ($308.75 million) of this sum would have gone into the Federal Government’s purse as dividend and taxes.

“The blockade was the toughest and lowest period of my five-year tenure at the helm of Nigeria LNG Limited. It was indeed a very lonely and stressful period for Nigeria LNG Limited.

“The Federal High Court judgement reinforces NLNG’s position that by the provisions of the applicable laws, the company is not subject to payment to NIMASA of the three per cent gross freight as well as the sea protection levy, and that the two per cent cabotage levy is inapplicable because NLNG’s vessels are not involved in coastal trade or cabotage.”he said.

Recall that NIMASA had accused NLNG of not paying three per cent gross freight on its international inbound and outbound cargo, sea protection levy; two per cent cabotage surcharge on all activities carried out for and on its behalf, as well as other sundry claims, all of which NLNG disputed. It was against this backdrop that NIMASA blocked the company’s export from Bonny Island for 22 days.

The development also prompted NLNG to file a case against NIMASA at the Federal High Court, Lagos. The organisation sought a judicial determination on the legality of levies sought to be imposed by NIMASA, and the blockade of the Bonny Channel by NIMASA as a result of the dispute.

Meanwhile,the Director General of NIMASA, Dr Dakuku Peterside, has expressed the agency’s dissatisfaction with the judgment and assured its management’s intention to appeal the ruling. He noted that “the agency’s legal team are waiting for the certified true copy of the judgment which we will study and respond as appropriate.”

But delivering judgment, yesterday, the judge, M.B. Idris, said NLNG was not liable to make the said payments to NIMASA, and that all such payments already made by NLNG to NIMASA should be refunded.

He said NIMASA was wrong in blocking the Bonny Channel for the purpose of enforcing the payments against NLNG.

According to the judge, Nigeria LNG Limited (NLNG) was right in its refusal to pay levies demanded by the Nigerian Maritime Administration and Security Agency (NIMASA).

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