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Nigeria senate to probe state oil firm over Nigeria LNG revenues

ABUJA, Nov 6 (Reuters) - Nigeria's Senate voted on Tuesday to investigate the alleged withdrawal of $1.05 billion by Nigerian National Petroleum Corporation (NNPC) from Nigeria LNG (NLNG), a venture owned by the state oil firm and foreign energy companies.

Nigeria's Premium Times newspaper reported on Monday that NNPC had used the portion of NLNG earnings that should have been passed to local and federal state authorities to fund the state oil firm's fuel purchases and subsidies during a shortage in late 2017 and early 2018.

NLNG, which produces liquefied natural gas (LNG) for export, is owned by NNPC and foreign energy firms Royal Dutch Shell , Total and ENI.

A Shell spokeswoman declined to comment. Officials from NNPC, NLNG, ENI and Total were not immediately available to comment.

The probe could undermine plans by the partners in NLNG to decide by the end of December on a major expansion. New LNG production facilities are expected to benefit from a tightening global market.

The Premium Times report said NNPC was not authorised to withdraw the $1.05 billion from NLNG that was meant to be shared between federal, state and local governments.

The Senate held a debate on Tuesday and voted to investigate the allegations, saying the money was not allocated to NNPC in the 2018 budget and so any spending by the state company of the cash was unauthorised.

Senator Bassey Akpan, who brought the motion to investigate, said he was "bringing the attention of the senate to various emails and complaints from the general public on the unauthorised withdrawal of $1.05 billion by NNPC from the NLNG account."

The fuel shortage at the end of last year and early this year left people queuing for hours at filling stations and saw NNPC spend at least $5.8 billion on fuel imports.

NLNG operates six LNG processing units, known as trains, on Bonny Island that produced 20 million tonnes of LNG last year.

NLNG's partners have promised a final investment decision on a seventh train by the end of this year, which could now be in doubt, although a front-end-engineering design (FEED) was awarded to Italy's Saipem, Japan's Chiyoda Corp and Korea's Daewoo E&C in July. (Reporting by Camillus Eboh Additional reporting by Sabina Zawadzki and Ron Bousso in London, Chijioke Ohuocha in Lagos, Bate Felix in Paris and Stephen Jewkes in Milan Writing by Paul Carsten Editing by Jason Neely and Edmund Blair)


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FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
On the changing landscape of global natural gas trade, the US has magnified its export power by remaining a net exporter for 13 months as of February 2019.
EWAnalysis: US LNG producers eye major growth
- Energy Web Atlas
The US LNG market has experienced rapid growth over the past decade due to the availability of inexpensive feedstock and increased worldwide demand.
Regional Focus: Nigeria moves to expand its liquefaction capacity
-Shem Oirere
The award in July 2018 of long-awaited contracts for the front-end engineering design (FEED) of Nigeria’s Train 7 gas plant expansion project to two consortia is the country’s latest attempt to address the enormous challenges of gas flaring and gas shortages for power plants and domestic consumption.


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