A Review of the Nigerian Energy Industry

NIMASA blockades NLNG again over levies

NLNG exports23 June 2013, Lagos – The Nigerian Maritime Administration and Safety Agency, NIMASA, has carried out a fresh blockade of Nigeria Liquefied Natural Gas Limited, NLNG, vessels at the Bonny Channel in Bonny Island, Rivers State, the premier gas exporter said in a statement, Saturday.

According to the NLNG, the action, which is in violation of a court injunction, has prevented entry and exit of NLNG vessels.

NIMASA confirmed the development in a statement, Saturday night, saying it has “in its enforcement of Nigerian laws, served detention notices/orders on vessels belonging to/chartered by the Nigerian Liquefied Natural Gas Company Limited”.

In its statement announcing the blockade, NLNG said: “At 1720hrs on Friday 21st June 2013, two Nigerian Maritime Administration and Safety Agency boats, with 15 naval officers on board, ordered that one NLNG vessel, LNG Imo, and one chartered vessel, Torm Thames, remain at NLNG’s loading bay, whilst another NLNG Vessel, LNG Oyo, remains outside the Bonny Channel until further notice.

“NIMASA subsequently issued Ship Detention Orders on 22nd June 2013, specifically detaining three NLNG ships (LNG Enugu, LNG Oyo, LNG Imo) and barring them from accessing or leaving the company’s loading bay”.

NLNG alleged in the statement signed by its General Manager, External Relations, Kudo Eresia-Eke, that the “developments are in flagrant disregard of the court injunction issued by the Federal High Court in Lagos in Suit No FHC/L/CS/847/2013 by Honorable Justice M.B. Idris, presiding, on Tuesday 18th June 2013, against the Attorney General of the Federation, Global West, and any other parties, including Nigerian Maritime and Safety Agency, NIMASA, from imposing any charges or taking any steps to block, detain or prevent access by the company’s owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria”.

It will be recalled that on 3rd May 2013, NIMASA blocked the Bonny Channel preventing entry and exit of NLNG vessels. This led to a series of meetings at the instance of the Federal Government which eventually ordered that the company should pay NIMASA its purported levies.

NLNG later made a payment, under protest, in the sum of US$20 million (approximately N3.2 billion) into NIMASA’s designated account and subsequently approached the court to seek proper judicial clarity and a lasting resolution to the conflict between the NLNG Act and NIMASA Act.

NLNG said the potential implications of the current action by NIMASA on its operations were enormous, adding that it would impact negatively on its international LNG buyers, the international financial market and the company’s shareholders.

It would also negatively impact Nigeria to which NLNG contributes 4 % of the GDP, as well as the investment climate in the country, the company said.

These are besides “the reputational impact this may have on Nigeria’s image within the international investment community”, it added.

NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas BV, SGBV (25.6%), Total LNG Nigeria Limited (15%), and Eni International (10.4%).

But in a statement confirming the NIMASA action, Mr Isichei Osamgbi, Deputy Director/Head, Public Relations, said the course of action was forced on NIMASA by “NLNG’s refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to”, and “its continued flagrant disregard for Nigerian laws”.

The statement read: “The Nigerian Maritime Administration and Safety Agency (NIMASA), has today in its enforcement of Nigerian laws, served detention notices/orders on vessels belonging to/chartered by the Nigerian Liquefied Natural Gas Company Limited (NLNG).

“This course of action was forced on NIMASA by the NLNG’s subsequent refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to, after reaching agreement with NIMASA on its outstanding debt and paying US$20m out of it and its continued flagrant disregard for Nigerian laws.

“Contrary to NLNG’s position, NIMASA is not aware of any court order against it or any suit brought by NLNG against NIMASA.

“By its action, the NLNG has trivialized the mediation process and the position of the Federal Government of Nigeria whose Nigerian National Petroleum Corporation owns and holds 49 per cent of the shares in NLNG and which endorsed the agreement reached that NLNG should pay its taxes/levies and observe all its obligations under the laws of Nigeria in which it is operating”.

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