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Government’s inaction robs Nigeria of $24b, 18,000 jobs

By Kelvin Ebiri (Port Harcourt) and Kingsley Jeremiah (Abuja) on 12/08/2018

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•President Buhari
•President Buhari

The Federal Government’s failure to get the Brass Liquefied Natural Gas (LNG) project in Bayelsa State, (which it initiated) on stream, nearly 15 years after, has robbed the country of over $24b in estimated revenue, as well as, about 18, 000 jobs.

Indeed, going by the plan of the project sited over 8005-hectares, shareholders, including the Nigerian National Petroleum Corporation (NNPC), were expected to have taken the first Final Investment Decisions (FIDs) since 2007, and recoup their investment in the first five years (2012).

Had the project been up and running, it would have enabled the country produce an additional 10 million metric tonnes of gas yearly, and also secure a brighter future in the international market.

The withdrawal of Conoco Phillips, which patented the cascade technology for it mothballed the project.

However, the management decided to adopt the APCI technology used in building the Nigeria Liquefied Natural Gas Company.

At the inception of the project was a major setback, the NNPC held a major equity of 49 per cent, while Conoco Phillips, ENI and Chevron each held 17 per cent.

But to due to unfavourable business climate and sundry conditions, Chevron and Conoco Phillips had to pull out.

Expectedly, their departure left a technical and gas availability setback in the face of low investments in the country’s gas fields.

An official of the Bayelsa State government who pleaded anonymity, told The Guardian that it was regrettable that the former Minister of Petroleum Resources, Diezani Allison Madueke, failed to ensure the actualisation of the project.

“It is regrettable that the investment in Brass LNG has remained in the doldrums.

Honestly, it is saddening that the worth of this multi-billion dollar projects now face an uncertain future.

There is no doubt that this will further hamper Bayelsa’s dream of being reckoned with as an investment destination,” he said.

Two years after the Brass LNG project started, the Olokola LNG project was also initiated in 2005.

Sadly, it has remained at the planning stage since then, consequently leading to loss of a projected output of about 12.6 million tonnes of LNG per year, 30, 000 barrels of Liquefied Petroleum Gas (LPG) per day, and 15, 000 barrels of condensate per day.

Olokola and Brass LNG were planned by the Federal Government to increase Nigeria’s share of the global LNG market, but the FIDs on these projects have remained elusive, while the projects have gulped about $600m and $1.2b respectively.

Experts, including the President, Nigerian Gas Association (NGA), Dada Thomas; President of Nigerian Association for Energy Economics (NAEE), Prof. Wumi Iledare; former President, Nigerian Association of Petroleum Explorationists (NAPE), Abiodun Adesanya, and Chairman, International Energy Services (IES) Ltd., Dr. Diran Fawibe, have linked the fate of the projects to unnecessary political interests.

They maintained that these developments have also wasted opportunities the country would have latched onto to place itself in good stead in the global gas market, especially when the price of gas was good.

Thomas, who is also Chief Executive Officer, Frontier Oil Limited, said the country has continued to miss economic benefits from Olokola and Brass LNG projects because the projects, like most other government plans, were over politicised, leaving viable economic decisions to suffer.

According to him, the nation missed the projects because Nigeria has continuously failed to make decisions swiftly and properly for the total benefit of the system.

•Sourced from a Guardian report

Source News Express

Posted 12/08/2018 11:12:55 AM

 

 

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