The Revenue Mobilization Allocation and Fiscal Commission has disagreed with Aliko Dangote on the sale of Nigerian Liquefied Natural Gas (NLNG) and other Federation Assets he proposed during an interview with a cable Television, the CNBC Africa as a way of augmenting the current revenue shortfall as a result of economic recession.
In a press statement signed by the Commission’s Acting Chairman, Shettima Umar Abba Gana, RMAFC argues that it would be unwise for the Federal Government to dispose of its crown jewels that generate Revenue and keep the Federation Account healthy over the long term.
Citing the NEITI 2013 audit and financial report of Nigeria’s oil and gas industry, RMAFC disclosed that the sum of $12.9 billion was received by NNPC from the Nigeria Liquefied Natural Gas (NLNG) Company over an eight-year period which the Corporation did not remit to the Federation Account. The audit according to the Commission also revealed that Nigeria Liquefied Natural Gas (NLNG) Company paid the sum of $1.289 billion as dividends for 2013.
“It is the considered view of the Commission that Nigeria’s Assets like NLNG and other strategic national resources should not be sold to meet short-term financial obligation”.
It would be recalled that Mr. Godwin Amefiele, Governor of the CBN indicated in a media report that the sum of $10bn would be realized from the sale of these Assets. The Commission is of the strong opinion that the same amount could be borrowed from the IMF and the revenue from these Assets could be used to amortize the loans over an agreed period. It should be noted that after the amortization of the loans, those Assets would still be owned by the Federation in addition to their regular dividends and Revenue.
The Commission advised that instead of selling off such vital assets which generate funds for the Federation, wealthy Nigerians should be encouraged to set up their own LNG projects, since Nigeria which ranks seventh in the world and first in Africa with natural gas reserves base totalling 188 trillion cubic feet (Tcf) as at May 1, 2015. In addition, Nigeria’s natural gas is regarded as one of the best in the world as it has low hydrogen sulphide (H2S) or carbon dioxide (CO2) impurity levels.
The call by Dangote for the Federal Government to sell of its stake in the NLNG and NNPC is coming three weeks after this paper exclusively reported that the Buhari administration was holding discussions with som businessmen from the United Arab Emirates (UAE) over the possibility of the Nigerian government selling off its stake in the two corporations to them. Sources in the Presidency have confided in this paper that President Buhari may be using Dangote to ‘test the waters’ before making its decision public.
(see link to story: EXCLUSIVE: Buhari planning to sell NLNG, stake in JVCs to Arab businessmen from UAE)
The NLNG was incorporated as a limited liability company on May 17, 1989 to harness Nigeria’s vast natural gas resources and produce Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs) for export.
The establishment of NLNG is backed by the NLNG Act.
The company is owned by four shareholders, namely, the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (49%); Shell (25.6%); Total LNG Nigeria Ltd (15%) and Eni (10.4%).
It has wholly–owned subsidiaries: Bonny Gas Transport (BGT) Limited and NLNG Ship Management Limited (NSML).
With six trains currently operational, NLNG’s plant, on Bonny Island in Rivers State, is capable of producing 22 Million Tonnes Per Annum (MTPA) of LNG, and 5 MTPA of NGLs (LPG and Condensate) from 3.5 Billion (standard) cubic feet per day (Bcf/d) of natural gas intake. NLNG’s near term expansion plans include construction of a seventh train to complement the existing six train structure, which when in operation will up the company’s total production capacity to 30 million tonnes per annum (MTPA) of LNG.
As the arrowhead of Nigeria’s efforts to eliminate gas flaring, NLNG’s operations have helped reduce Nigeria’s Flaring Profile from 65% to below 25%. The company also supplies about 80% of the annual domestic LPG (Cooking Gas) consumption.