Investors will lose confidence if NLNG act is amended, Attah warns

Tony Attah, managing director of the Nigerian LNG Limited, says the proposed amendment to the NLNG act will result in immediate loss of investor confidence.

Attah, who spoke at the 2017 Nigeria Oil and Gas Strategic Conference and International Exhibition in Abuja, lamented the decline in investments in gas and the liquefied natural gas industry.

“It is time for gas. We need deliberate decisions and policies to decouple oil from gas and attract investment. We need to do that now. Investments in the gas and the LNG industry are declining,” he said.

“It is already difficult as things stand; to find foreign direct investment and growth in the gas industry has been cautious after the recent downbeat global crude oil price. In addition to this, Nigeria is ranked 167 of 189 countries in the ease of doing business index.

“However, if we continue with the self-inflicted barriers in our gas industry, we might miss the opportunity to make this country a major player in the global energy mix.”

He said Nigeria needs to create incentives that would attract investments and preserve the sanctity of contracts and agreements.

“Take Nigeria LNG, for instance, only recently, the house of representatives began moves to amend the NLNG Fiscal Incentives, Guarantees and Assurances Act, a key enabler responsible for the success of the company. The NLNG is a successful Nigerian company, with an asset base of $11bn as well as the fourth largest LNG plant in the world.

“The amendment will result in immediate loss of investor confidence. This is especially pertinent in view of the imminent requirement of over $1bn investment every year in the upstream for the next few years in order to guarantee steady gas supply just to ensure that the NLNG’s Trains 1 – 6 can be kept full over the contracted life of the plant.

“If shareholder confidence is negatively impacted, it would mean that those funds will not be forthcoming, and this will clearly constrain even the basic survival of the NLNG’s current operations and Nigeria’s opportunity for gas development.”

Attah said the company generated $90bn in revenue as of 2015, paid $5.7bn in taxes and committed more than $200m to corporate social responsibility projects.