Nigerian parliament move to review NLNG act could hit investment

10/14/2016

Nigeria Lng Plant

Photo courtesy of Nigeria LNG.

(Reuters) Nigerian lawmakers are looking to amend the 1989 law that set up the Nigeria LNG (NLNG) partnership, potentially putting billions of dollars of investment at risk, its chief executive said on Thursday.

NLNG, often touted as a successful public private partnership, is a venture between state-owned Nigerian National Petroleum Corp. (NNPC), Royal Dutch Shell, Total and Eni to produce LNG for export.

CEO Tony Attah said lawmakers in Nigeria's lower house were seeking to cancel government guarantees which helped unlock private investment in NLNG as well as introduce levies paid by exploration firms equivalent to some 3% its total budget.

He said the LNG produced by NLNG destined for Europe and Asia was exempt from the levy under the 1989 act and that the parliamentary amendment had gone for a public hearing.

NLNG is also at the final stage of deciding whether to invest in a project known as Train 7 which would boost its LNG exports to 30 MMtpy from 22 MMtpy at a cost of about $12 B, Attah said.

"Train 7 will not happen if we don't have the NLNG act as it is today. The amendments as proposed will not deliver value, they will erode value, they will not make NLNG grow," he told Reuters in an interview in Abuja.

Nigeria, Africa's largest economy, is facing its worst recession in more than 20 years after low oil prices slashed government revenues and hit the currency, leaving the state struggling to find ways to fund its record 2016 budget.

NLNG, which has 23 LNG carriers, has generated $85 B in 17 years with assets of more than $13 B.

By Chijioke Ohuocha; Editing by David Clarke