Challenges Before Attah, New NLNG’s Helmsman | Independent Newspapers Limited
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Challenges Before Attah, New NLNG’s Helmsman

Posted: Jul 18, 2016 at 3:25 pm   /   by   /   comments (0)

Charles Okonji, Lagos
As Mr. Tony Attah, the new Managing Director of the Nigeria Liquefied Natural Gas Limited (NLNG) steps in, indications have emerged that it might not be an easy road for him, in spite of his professionalism and track records in Shell, which holds 25.6 per cent equity in NLNG.

Attah, with a 28-year experience in the Nigerian oil and gas industry, is a trained mechanical engineer and an MBA holder, who started his career in Sokoto Cement Company as a Maintenance and Operations Shift Supervisor.

He joined Shell Petroleum Development Company (SPDC) in 1991, working in various technical and management roles in Field Maintenance, Production Operations, Core Engineering and Major Projects Commissioning, Rotating Equipment Engineering among others.

Considering the current crisis in the nation’s oil and gas industry, some experts believed that Attah, who was also once Head of Joint Venture Economics in Commercial, would have a lot of challenges to contend with.

Amendment of NLNG Act

The recent move by the House of Representatives to amend NLNG Act might be a serious challenge for Attah, as, if the move sails through, would make NLNG not only to contribute to Niger Delta Development Commission (NDDC), but also portray Nigeria as a country that would not honour agreements.

The House Committee on Gas Resources had held a public hearing in Abuja on the bill to amend the NLNG Act, but the former Managing Director, NLNG, Mr. Babs Omotowa, said that keeping agreements entered into with investors was crucial to retaining and attracting foreign investment into the NLNG, as well as other sectors of the economy in line with the drive of the current administration.

Omotowa said that the intervention of the NLNG, more than any other single factor, had led to the progressive decline in Nigeria’s gas flaring profile over the years, from well over 65 per cent in the 1990s, to less than 20 per cent today. Therefore, aside from the fact that the company was earning revenue for the Federal Government and its other shareholders, it was cleaning up the Niger Delta environment in the process.

The NLNG Act, he argued, was pivotal to the commencement of the project in the first place and for the huge success, which the company had represented for Nigeria, with the country reaping over $33 billion from its initial investment of $2.5 billion. The Act had enabled the company to grow from its original two trains to six trains, creating an asset base of $19 billion, 49 per cent of which the Federal Government owns.

Omotowa said: “The incentives, which have been granted to the NLNG, are not peculiar to Nigeria. They were granted to encourage investments in gas utilisation to reduce flaring, which had become a major problem for the country. Examples of similar incentive initiatives abound in Angola (12 years), Oman, Malaysia, Qatar and Trinidad (up to 10 years). Other more generous incentive schemes also exist in Nigeria, in the Free Trade Zones.”

An analyst posited that Attah would face serious challenge in lobbying the National Assembly to drop the amendment of the NLNG Act, as the lawmakers have been determined to terminate the incentives given to the gas company under the current Act governing the NLNG.

Protection of pipelines

Even though President Muhammadu Buhari had assured that his government would ensure adequate protection of oil and gas installations across the country to prevent vandalism, oil theft and piracy, the continuous flow of gas to NLNG facilities at Bonny would be the major task of Attah, as the Niger Delta Avenger had list NLNG’s offices as possible targets of attacks.

Buhari, who disclosed that the country had lost so much to the vices, said that the situation had tremendously affected the economic fortunes of the county, ensuring that his administration would undertake appropriate reforms and implement fresh policies to boost national income from oil and gas production.

According to him, the removal of bureaucratic bottlenecks created by multiple government agencies that currently impede the operations of companies in the oil and gas sector would be one of the reforms to be undertaken by his administration.

He said: “It is the responsibility of the Federal Government to secure the environment. The vandalism of oil installations and pipelines, piracy, oil theft and the fall in the international price of oil have made our economic situation very disturbing. This government will do all within its powers to secure the environment and encourage more investments in the oil sector.”

Inasmuch as one would not doubt the capacity of the Federal Government to live up to this expectation, Attah would not rest on his oars until there would be a high level of security for all NLNG’s facilities, as any disruption would affect the revenue of the company.

NLNG, from inception, had mopped up gas that would otherwise be ?ared, thus making signi?cant contributions to the nation’s income, delivering in the last thirteen years over $13 billion in dividends. The company paid over $18 billion on gas purchases from oil producing companies, of which the Federal Government of Nigeria owns 55%-60%.

The company converted about 119 billion standard cubic metres (Bcm) or 4.2 trillion cubic feet (Tcf) of Associated Gas (AG) to exports as LNG and Natural Gas Liquids (NGLs), thus helping to reduce gas ?aring by Upstream Companies from over 60 per cent to less than 25 per cent.

Flared was only permitted in order to eliminate waste gas, which could not be converted to any further use. Flared also act as safety systems for non-waste gas and are released via pressure relief valves, when required, to ease the strain on equipment.

Building of Trains 7 and 8 with target of 18,000 jobs

The company recently announced that it had shelved the idea of building a single big train for liquefaction of natural gas after 10 years of Train 7 and $360million expenditure committed therein, disclosing that it was considering building smaller Trains 7 and 8 with 4.3million tonnes per annum capacity each.

NLNG said it would take Final Investment Decision on the two trains before the end of 2019. But stakeholders are of the opinion that the new NLNG’s boss should take the bull by the horns with a view to ensuring that the trains come to fruition.

A gas expert, Mr. Ade Thompson, advised: ‘’I think the environment is right now given the commitment of the current administration to explore the gas potentials of the country for its development. It behooves on Attah to use his experience, professionalism and determination to ensure that the terms of the Trains are well religiously committed to.”

The Train 7 and 8 project, it was gathered, would generate over 18,000 jobs for Nigerians. NLNG had provided more than provided more than 2,000 jobs each construction year. Overall, the major sub-contractors employed 18,000 Nigerians in technical jobs in the Base Project.

Through each Nigerian Content plan for its contracts, NLNG had promoted the development and employment of Nigerian manpower.

Sustenance of Local Content Development

Attah is envisaged to sustain the NLNG’s supports the development of community and Nigerian contractors to enable them achieve standards of excellence.

Prior to his assumption of office, NLNG, through its initiative, empowered local contractors via the Finima Legacy Project, which made local contractors to have capital investments in their companies thereby expanding their operating capacity. The capabilities of local vendors were developed through mentoring and engineering of partnerships between the more established Nigerian vendors and the community vendors.

NLNG’s shipping subsidiary, Bonny Gas Transport (BGT), ordered six new Dual Fuel Diesel Engines (DFDE) LNG carriers. The carriers are currently under construction in South Korea by Hyundai Heavy Industries (two ships) and Samsung Heavy Industries (four ships).

The Nigerian Content commitment in the project, which is defined in a Memorandum of Agreement between NLNG/BGT and the shipyards (Hyundai Heavy Industries and Samsung Heavy Industries), which included major initiatives such as the training and development of Nigerians (both in Nigeria and Korea) in various aspects of ship design and construction, the supply of materials such as paints, cables, anodes and furniture by Nigerian suppliers for the construction of the vessels, and feasibility study on the establishment of the first LNG ship dry-docking and ship repair yard in Nigeria.

Berger Paints and Paints and Coatings MN produced and exported over 350,000 litres of paints; Nexans Kabelmetal has shipped over 130,000 metres of low voltage (LV) cables and METEC West Africa has exported over 9000 pieces of Aluminium and Zinc sacrificial anodes – all to the ship yards in South Korea for use in the newbuild vessels.

METEC West Africa and Nexans Kabelmetal, through NLNG’s Nigerian Content initiatives, also underwent international class certification and inspection for the manufacture and supply of sacrificial anodes and low voltage (LV) cables respectively to meet the requirements of marine applications.

Berger Paints PLC increased its portfolio of paints and manufacture to international standards, having installed state of the art laboratory equipment and acquired additional production equipment. Paints and Coatings Manufacturers Nigeria PLC (PCMN) acquired additional mixers and laboratory equipment and went ahead to become the first company in Africa to receive the Inter Marine Organisation’s Inter-shield 300 Ballast Tank Coating certification. Holborn Nigeria Limited developed capacity to manufacture 12 inch (30mm) diameter HDPE pipe which had hitherto not been manufactured in the country.

NLNG initiated deliberate technology transfer to enable Waste Pipe & Drainages (WPD) to safely and successfully complete the change out of all nominated compressed air dryer bed desiccants in U-4700 (14 vessels in total). This made WPD the second Nigerian contractor with this level of proficiency that they can compete with the previously sole Contractor (CAKASA) in LNG Trains molesieve bed change out activity.

Deepening domestic LPG market

Currently, NLNG’s cooking gas supply to domestic market is 250,000 metric tonnes, while the supply level is 148,000 metric tonnes. Stakeholders advised that the current leadership of the company should explore avenue to further increase supply of the product in domestic market with a view to increasing the consumption of cooking gas in Nigeria.

NLNG commenced the supply of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas to the domestic market in 2007 when refineries became challenged and supply was grossly inadequate. Since then, the issue of inadequate supply has become a thing of the past.

The intervention, which is in line with company’s vision of helping to build a better Nigeria, has significantly contributed to the stimulation and development of the domestic LPG market in Nigeria and has effectively brought down the price of cooking gas from over N7,000 in 2007 to less than N3,500 per 12.5kg cylinder today.

NLNG is committed to delivering 250,000 tonnes of LPG into the Nigerian market annually and has signed Sales and Purchase Agreements (SPAs) with fifteen off-takers (all Nigerian companies) for the lifting of LPG for the domestic market.


NLNG recorded $6.8 billion in revenue for the year 2015, representing shortfall of 40 per cent when compared with 2014 revenue which was $10.8 billion.

The decline was blamed the decline in revenue on decline in global crude prices, but stakeholders are of the opinion that the new boss of the company should make conscious efforts to mitigate against losses in subsequent years.