Ok

NLNG Panics As US, Australia Enter Gas Market

Nigeria’s tough economic realities caused by the continuous fall in global crude oil prices may worsen as the country’s other source of revenue, gas, is currently being threatened at the international market, the Nigeria Liquified and Natural Gas company has warned.

The NLNG also noted that the fall in global oil prices would continue till the end of 2015, adding that it might worsen in the coming year.

The firm, in a communique that was made available to our correspondent in Abuja, expressed worry over the impact which the fall in crude prices was having on its revenue, stressing that the entry of the United States and Australia into the LNG market was “a real cause for concern.”

The communique which summarised the third NLNG commercial division external stakeholders forum that was held in Abuja, noted that although these challenges were being managed, the regulatory environment had shown increasing uncertainties.

The firm said, “The recent fall in crude oil prices from above $100/bbl ($100 per barrel) in early 2014 to below $60/bbl in early 2015 and its impact on global LNG/gas prices as well as the demand/supply positions in both our primary and secondary markets in the Atlantic and Pacific Basins have had a significant impact on our revenues and profitability.

“The trend which will persist till the end of 2015 and which may even worsen going into 2016 with the entry of US and Australian LNG volumes into the market is a real cause for worry.”

Nigeria has one of the largest gas reserves in the world and is the second largest supplier of LPG globally, supplying four million tons of the product per annum. In Nigeria, LPG is primarily used as cooking gas.

Although NLNG is the primary source of LPG in Nigeria, a bulk of supply into the country is being imported.

http://www.punchng.com/business/business-economy/nlng-panics-as-us-australia-enter-gas-market/

Let me start putting together my 25-man squad...

I'm wondering: how does an apparently healthy candidate fail medicals when we are not athletes? This is a legitimate question so anyone that truly knows (not assumptions) should enlighten me.

TheSauce:


Decisions like:
1. Whether to propose to my bae or not
2. Whether to pre-order this BMW or not
3. Whether to resign or not (I hope no one has done dat sha. Wait for notifications for medicals first o... Ehen)

God will guide our decisions.

Oga, better go change this your moniker. The first I saw "TheSauce" I celebrated the arrival of a genuine sauce after the unfortunate departure of Dplacement but clearly you yourself need one.

chuqqym:
Brace yourselves for take off...

Sauce?

forkadict:


Well, I'm not sure about what you saw but for me I saw:

1. That Late General Sanni Abacha and former President Obasanjo were visionary leaders. They had long term perspective on issues particularly in the gas sector of the oil and gas industry.

2. That the group of morally bankrupt, extra ordinarily greedy, very gluttonous, extremely dull and myopic elements that call themselves governors are willing to sacrifice their future well being on the altar of today's comfort. We have the money, yet it is posing a big issue to get the FID for train 7. Imagine how difficult it will be to get the approval when the money isn't available. These murraforkers need to go for a few lessons on financial propriety. Morrally bankrupt id.iots!

P.S: This post is strictly influenced by the contents of the article.

Interesting points garnished with some strong language. Okay, so this is what I saw, in a similar vein:

1. As per the instructions given by Obasanjo then, NLNG has been more than self-sustaining, financing it's expansion from train 3 onwards and even financing the takeoff of the enigma that are Brass and Olokola LNG through the dividends it pays to NNPC. This, I think, is remarkable.

2. When the instructions were given it never was a problem because of the oil windfall. There was so much oil earnings that nobody really cared. Now, oil revenues have dwindled and suddenly, everyone cares.

3. If the governors have their way it is obvious there's going to be a funding challenge for train 7. Only about half of that $7.3 billion would be available to NNPC for investment which would fall short of the $6 billion or so share of investment required from NNPC for train 7, and Brass and OK LNG would continue to be a mirage.

And we all know what point 3 would mean, if it happens. It would hamper the progress of the company and the country at large which IMO would be unwise given the uncertain future of oil revenues and given the vastness of our gas reserves relative to oil, as a professor of oil and gas once profoundly told us "Nigeria is a gas province with pockets of oil" and as such we should be concentrating more on gas than oil since we have much more of it. Hopefully the looted funds are recovered in time to ease the tight financial situation in the country perhaps make our governors return to thinking with the future in mind.

Crr7:

The only thing I am saw is that everybody (including nnpc) is getting set for 30mtpa. In all the debacle, my employer has fulfilled its obligation by accordingly remitting tax to firs & dividend to nnpc. Its left for the president, nnpc & ngf to agree a common ground, my nlng should be left out of this.
Abeg,when be our trip to intels camp?

Hehe. Someone's very confident.

Following the controversy surrounding the retention of dividends paid by the Nigeria Liquefied Natural Gas (NLNG) Company Limited to the Nigerian National Petroleum Corporation (NNPC), it has emerged that the initial directive to retain its 49 per cent share of dividends was actually given by former President Olusegun Obasanjo when he was in office.


Arising from this is another brewing controversy as to whether the dividends belong to the Federation Account for sharing amongst the three tiers of government, or just to the federal government, in this case the NNPC.


The previous management of NNPC when Obasanjo was in office had argued successfully that while the taxation revenues of NLNG belong to the Federation Account, the dividends belong to NNPC, which needed the dividend payments to reinvest in the new trains of NLNG.


It was on this basis that Obasanjo ruled in their favour and the Jackson Gaius-Obaseki-led NNPC then ring fenced the dividends in a special (investment) account and used it to successfully reinvest in NLNG Trains 3 to 6 without recourse to the federal government, according to officials familiar with the transaction.


But with the state governors seeking more revenues, they are today insisting that they were short changed by the Goodluck Jonathan administration in not paying the dividends to the Federation Account for sharing amongst all tiers of government.


In reinforcing the narrative of state governors, the Nigerian Extractive Industries Transparency Initiative (NEITI) also recently disclosed that NNPC had failed to remit $11.6 billion to the Federation Account, which was paid by NLNG and called on President Muhammadu Buhari to recover the amount.


NLNG was set up as a joint venture company comprising NNPC with 49 per cent equity, Shell, which serves as its operator - 25.6 per cent, Total LNG Nigeria Limited - 15 per cent and Eni - 10.4 per cent, as its shareholders.


However, it is not clear if NNPC’s equity in NLNG was paid for by the “federation” or the “federal government” as this was done during the military regime of the late General Sani Abacha when it was basically a command unitary government.


A Final Investment Decision (FID) was taken on NLNG by its shareholders in November 1995, while the construction of the gas transmission system, and second and first trains were completed in September 1998, August 1999 and February 2000 respectively.
Since then, it has built four more trains between November 2002 and December 2007 to bring the total number of trains to six.


The base project (Trains 1 and 2) which cost $3.6 billion, was financed by NLNG's shareholders. The third train (expansion project), including additional storage, cost $1.8 billion and was funded by shareholders as well as reinvested revenue from the base project.
The NLNG Plus project (Trains 4 and 5) cost $2.2 billion and was funded with a combination of internally generated revenue and third party loans amounting to $1.06 billion.


Train 6 (NLNG Six project) cost $1.748 billion and financing was handled by shareholders, bringing the total cost of building six LNG trains to $9.348 billion.


The FDI for Train 7, however, has still not been taken despite efforts by NLNG to get the federal government to give NNPC the green light for the next train.


But THISDAY checks revealed that NNPC currently has some $7.3 billion dollars in the investment account with which it intends to fund its share of NLNG Train 7, Brass LNG (in which over $1 billion has already been invested) and OK LNG, which is still troubled by economic and investment hurdles.


But governors at the last National Economic Council (NEC) meeting determined that the dividends belong to the Federation Account and must be shared amongst all tiers of government.


It is not clear what the final decision of Buhari will be but oil industry experts and NNPC officials have cautioned that should the funds be shared and spent, there will have no funds to reinvest in gas at a time when the future of oil revenues is uncertain and oil prices are at an all time low.


Providing insight on Obasanjo’s directive, a retired senior executive of NNPC confirmed that the corporation was asked to retain the dividends paid by NLNG in order to meet its share of investment after FDIs had been taken to build subsequent trains of NLNG.
“As you are aware, from the Abacha days, Nigeria was already having problems funding its share of cash calls for the joint venture oil contracts with the oil majors.


“So in order to avoid a situation whereby NLNG’s expansion was impeded by the same problem, Obasanjo directed that we retain the dividends paid by the company for its expansion programme,” he said.


He added that the former president’s directive was implemented to the letter because it was in the interest of Nigeria to continue to harness its gas resources, as gas is the future, and today it is saving the country in the depressed crude oil environment.
“Besides, Nigeria is more of a gas producer than an oil producer, so we deemed the directive as a life saver for NLNG and Nigeria’s future,” he explained.


Officials of NNPC also confirmed THISDAY's investigations that the corporation currently has about $7.3 billion from NLNG dividends but the money has been kept aside for investment in NLNG Train 7, Brass and OK LNG.


Another official also expressed concern that at the last NEC meeting, the governors had insisted that all funds from NLNG should be paid into the Federation Account, adding: “If we do not reach a compromise with the governors, when we have to fund our share of Train 7 and other LNG projects, we will encounter the same difficulties we encountered with the JV cash calls, but we believe the issues will be resolved as NNPC becomes more transparent with its operations and opens its books to scrutiny.”


Given its pioneer status in 1999 when it commenced production, NLNG was granted a tax holiday for several years by the federal government and did not start to pay taxes until 2014.


According to the information on its website, in 2014, it paid N220 billion (about $1.375 billion using N160/$ as exchange rate) to the Federal Inland Revenue Service (FIRS) while its second tax payment of $1.6 billion was in June this year and shared by the three tiers of government in July. It was this payment in July that opened the eyes of state governors to NLNG’s revenue and are thus seeking more than the tax revenue from the company.


NLNG tax payments so far make it the highest taxpayer in Nigeria and sub-Saharan Africa.
In terms of dividends to its shareholders, the company has paid $30 billion between 2004 and 2014, putting NNPC’s share of dividends at $14.9 billion to date.

https://www.nairaland.com/2547991/how-obasanjo-ordered-nnpc-retain

Are you see what I am saw?

Baba teaching leaders to be responsible and accountable for anything and everything that happens under their stewardship the hard way

TheSauce:


Oga what exactly do you want na? AC is over and ure still doing anyhow. Abi you want to give us expo on how to wait for feedback?

Okay, we'll take:

100 M-1 Abrams Tanks
20 AH-64 Apache Attack Helicopters
20 CH-47 Chinook Transport Helicopters
30 UH-60 Black Hawk Helicopters
10 C-17 Globemaster Cargo Transport Planes
350 Humvees
25 F-16 Fighting Falcon Fighter Jets
and a couple of B-52 Stratofortress Strategic Bombers

Thank you.

I just had to move us out of that page.

This 120 figure that you guys are throwing around with reckless abandon...

kblaze111:
how can you explain liquefaction in bonny and ship dockyard in lagos.[i][/i]
maybe there is some unseen strategy?

I think you misunderstood the dockyard to mean a port (or more appropriately an LNG export terminal) which it is not. The planned dockyard by Badagary Ship Repair and Marine Engineering Limited will serve to "bridge the gap created by the absence of an operational dockyard to cater for the repair and maintenance of Very Large Crude Carriers, LNG carriers, large and medium size carriers, drilling rigs and supports vessels." So it's basically a vessel service center and unlike in the case of an export terminal, they don't have to be side-by-side with the liquefaction plant. I think when it comes to siting such an all-purpose facility, the amount of traffic is among the major considerations (as @dway4ward mentioned though I take exception to the way he apparently concluded on your motives) plus NLNG said that Badagry was chosen (by the company) "after feasibility studies were carried out at various sites (Onne, Bonny, Olokola, Badagry, Ogogoro Island, Ladol, etc.)"

And true the dry dock is not NLNG's, they are merely promoting its development by "the investment community."

forkadict:


I just pray the guy aggressively pushes for the implementation of train 7.

I think circumstances are generally in favour of the implementation of Train 7. The president himself lamented that we are celebrating a mere 6 trains, saying "it could have been 12 trains if all had gone according to plan" which could translate to commitment on the part of FG (via NNPC the largest shareholder) towards expansion of NLNG's capacity hence Train 7. Yes the oil market is on the downturn. Oil companies are cutting expenditure including postponing and scrapping proposed projects. That should normally affect NLNG because it is basically a consortium of oil companies. Natural gas prices have also been affected with NLNG reportedly having lost 30% revenue as at April this year compared to 2014. However, to quote GM Commercial NLNG, "when you have this kind of reduction of revenue in terms of pricing, one of the other ways to mitigate this is to increase your volume and gain market share" which is exactly what Train 7 will help NLNG achieve especially with long term SPAs having been already executed with 5 buyers. In light of all this it is very probable that train 7 will go ahead as planned, which is good news in terms of employment opportunities with them. Just my thoughts.

With the appointment of a new NNPC GMD by the President, there will be a substitution in the NLNG board.

I no tell una say dem no fit deny us military assistance when there are other sources notably the Soviets.

Ok na. Where are the Soviets? We've got some business to do.

CHM11:


Going through the back door includes having someone pull off strings for you...they are all wrong and you definitely are a WRONG HAND if integrity is part of the shared values of the company's staff. Yes, 99% of persons will like to be put through the back door if given the chance, this doesn't make it right!!...

Someone who can be put into a company through biased means will definitely be likely to do things that compromise standard acceptable modus operandi.

I agree.

Because results go soon comot see as activity don dey constant for dis thread and the closer it gets to d-day the more frantic peeps get.

Okay OP, I see your point. We are in such a dire situation in this country development-wise that Zoology for instance or Art shouldn't be of major concern to us. Matter of fact, we should tone down on pure science research courses for now (eg. Mathematics) because there's a lot of already researched knowledge in those fields in the world that we haven't even put to use yet. So it should be more of practice-based courses of study for us until we catch up with the world and we know we can. But rather than scrap those courses (they have their uses) we should drastically limit the enrollment into them while raising that of the practice-based courses. A BA Linguistics class shouldn't have more than a dozen students IMHO while we should have a class of 50+ Mechanical engineering students. The problem is, it is more difficult to properly train larger numbers in those practice-based courses because they involve lots of laboratory equipment etc. which is a major area of inadequacy in most of our universities, while there's no such requirements for say, Philosophy as long as there's a big enough comfortable lecture theater with a public address system and maybe a projector they can comfortably handle training over a hundred students in a set.

Congrats

Most of us have done ours and yet we still haven't pieced together how exactly (i.e. based on what) they batched us for the AC. I saw all my theories fall apart on my day when I saw the mix and there was no discernible pattern.

Come, why una dey push this thing further na? The facilitator guy said it will take them "6 to 7 weeks" to finish the AC and that was during the first week, and he then said they will get back to us "as soon as possible." So all things being equal I'm expecting my medicals invite sometime in August.

I found time to go through the "NLNG Facts and Figures 2015" document I downloaded from their site and I must say it's a pretty good read. Gives a comprehensive overview of the company and what they do and how they contribute to the economy, host communities etc. Really well-made document with photos and stuff. Definitely worth a look. There's a 2014 edition as well.

hsim247:
I mentioned it during my interview. My panelist wan laugh die!

Mentioned...?

UpdateAll:
http://www.premiumtimesng.com/news/top-news/186231-presidency-says-bailout-to-states-drawn-from-nlng-dividends-says-excess-crude-fund-intact.html


I hail NLNG.

Yeah basically proceeds from our company bailed out state governments.

LumiNG:


The last sentence in this article/news.
That's the current reality I'm concerned about.

That does raise some concerns. But check out the last sentence in this article:

http://www.sweetcrudereports.com/2015/05/18/nlng-records-30-revenue-decline/

A certain spokeswoman of the agency should brace herself, cos she's definitely next.

http://www.sweetcrudereports.com/2015/07/01/pengassan-tasks-fg-nlng-shareholders-on-train-7/

Excerpts:

Oil workers, under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have urged shareholders and Board of the Nigerian Liquefied Natural Gas (NLNG), to approve the completion of Train 7 project to make the company more competitive in the global gas market.

It said the completion would enable the country to end gas flaring by harnessing the flared gas for domestic use and for export as well.

“Train 7 completion will definitely increase the company’s share of global market, enhance flare reduction or total flare out, and attract $10 billion Foreign Direct Investment (FDI) with zero cash out from the government.”

According to him, “Other benefits Train 7 will bring on completion are job creation through the construction of the plant in Bonny and construction of gas pipelines in other communities; increase capacity to meet domestic market demand, and maximisation of the Nigeria Content Development Act through local capacity building.”

Johnson urged the government to give priority to domestic gas utilisation over export, enhance gas utilisation with full
reappraisal of the Gas Master Plan, and adequately fund the NLNG’s operations.