The deadlock is costing $22 million (N4.48billion) a day in lost gas exports, according to an economist.
Since June 21, the agency has barred LNG cargoes from entering or leaving the loading bay at the Bonny terminal in the Niger Delta. LNG accounted for 9 percent of Nigeria’s exports in 2012, said economist Bismarck Rewane, CEO of Lagos-based consultancy Financial Derivatives, or roughly $8.1 billion a year, a quarter of Nigeria’s federal fiscal budget for 2013.
“That’s about $155 million a week, of which 51 percent belongs to the Nigerian Government,” he said. “That is a lot of money to the Finance Ministry.”
The parties were in court in Lagos on Friday to try to resolve the dispute over the lawfulness of the blockade and the levies, which NLNG spokesman, Kudo Ereia-Eke, had earlier said he hoped would be resolved.
The gas company owns 49 percent of NLNG with Shell holding 25.6 percent, Total 15 percent and Eni 10.4 percent. NLNG declared force majeure on gas exports on June 28 because of the blockade. Ereia-Eke declined to give figures for NLNG losses, and Finance Ministry officials were not immediately available.
NIMASA spokesman, Isichei Osamgbi, said the agency was seeking cumulative levies of $158 million. “Our business is not to cause any crisis to the gas sector. We just insist on our dues. Why shouldn’t they pay the levies that are applicable to anybody?” he queried.
NLNG argues that the Act that established it makes it exempt, but Osamgbi said the exemptions expired after the first year of profit, following a 5-year holiday.
A shipping source said NIMASA already charges LNG tankers $600,000 per berth to load at the NLNG bay, four times higher than the average among the highest fees of any LNG port.
NLNG says a court order was issued on June 18 preventing NIMASA from blockading the port until a resolution was found, but the maritime agency denies that. Buyers of Nigeria’s LNG include Spain’s Repsol, Italy’s Enel, Britain’s BG Group, France’s GDF Suez and Portugal’s Galp.
“Customers of NLNG in Europe and Asia are starting to go into panic mode,” a trading source told Reuters.
Last Thursday, there was hint that NLGN had opted to settle its indebtedness to NIMASA, in compliance with the NIMASA Act. This emerged after the court session, where the counsel to NLNG, Mr. Wale Akoni, SAN, informed the court that NLNG was in the process of finalising the terms of a proposed consent order on its agreement with NIMASA and other parties for the vacation of an earlier order made against the Attorney General of the Federation, Global West Vessel Specialist Limited and NIMASA in the suit.
Mr Akoni craved the indulgence of the court for an adjournment to come back Friday for the matter, to enable the NLNG shareholders come to terms on the consent order to be proposed to the court on the basis of the terms of the consent order agreed by the parties. The court had earlier adjourned the matter briefly at NLNG’s request for it to be able to tidy up its side.
However, on the return of the parties to court at 12.15pm, NLNG had still not been able to reach a clear position on the terms for the consent order.
It will be recalled that due to an ex parte order obtained by NLNG without NIMASA as a party to its claims and the contempt proceedings initiated against NIMASA, NIMASA, through its counsel, Mr. Mike Igbokwe, SAN, leading Mr. Matthew Egbadon and Mr. Emeka Akabogu, filed an application for the contempt proceedings to be set aside, for the ex parte order of interim injunction to be vacated and for setting aside the Notice in Form 48 on the grounds that it was not a party to the suit, it had not been properly served, the court had no jurisdiction to decide the suit and the contempt proceedings were an abuse of court process.
An application was also filed by the office of the Attorney General of the Federation, represented by Mr. Fabian Ajogwu, SAN, for an order discharging and vacating the ex parte order of interim injunction against him since it was principally against NIMASA which was not a party to the suit and not the Federal Government, and that the Attorney General sued as the 1st Defendant is not a party to the dispute between NLNG and NIMASA.
In addition, an application was filed by counsel to Global West Vessel Specialist Limited, Mr. A.J. Owonikoko, SAN, seeking that the company be struck out from the suit on the grounds that the suit discloses no legal right and cause of action against it, that the court lacked jurisdiction to determine the suit and that the notice of contempt proceedings against it was not addressed to any named person in accordance with the law.
– Daily Newswatch