Govt earns $85b from NLNG operations in 15 years

    Written by Sulaimon Salau

 THE Federal Government has earned about $85 billion from the operations of the Nigerian Liquefied Natural Gas (NLNG) in the past 15 years.

  The Managing Director and Chief Executive Officer of Nigeria LNG Limited, Babs Omotowa, who disclosed this at the Chartered Institute of Personnel Management of Nigeria (CIPM) conference in Abuja Tuesday, stated that Nigeria LNG Limited has de-mystified the various malignant myths about doing business in Nigeria as it has delivered sterling performance within its 15 years of operation.
   He said the NLNG, which represents an investment of $7.5 billion has now yielded revenue of $85 billion to date, as well as growing its asset base to $13billion to emerge the 4th largest LNG plant in the world.

   Omotowa, who attributed the growth to a robust organizational structure and improved capacity of its indigenous workforce said, “we ended the year 2013 as the second best in the world among thirteen LNG peer sites on overall operational efficiency index.”

   He said: “Today, Nigeria LNG Limited operates its six-train plant at a best-in-class reliability of 97 per cent quite above a world-class top quartile reliability of 95 per cent.

   “We have also grown from an annual cargo count of 5 per annum in 1999 to over 300 cargoes per annum, pushing the boundaries of internal capacities year on year.

   “On HSE, we have a strong commitment to the health and safety of all personnel in our worksites. As complex as the operations of the LNG plant is, and through a competence and stringent hearts and mind programme, we recently completed over 20 million man-hours of work without any lost time injuries, a record only very few companies in the world can boast about.

  “We have also grown from a 4 billion dollar per annum company to one of over 10 billion dollar company in fifteen years favourably comparing with the turnover of many companies in the 2013 FSTE 100 list.

An investment of $7.5 billion dollar has now yielded revenue of 85 billion dollars to date and we now have a $13billion asset base, the 4th largest LNG plant in the world. In addition, we are the single largest ship owner in Nigeria with 24 LNG carrier ships.

   “Importantly, we are known by our customers as a reliable plant, apart from a period last year where we were obstructed by a regulator and the periods of bunkering in previous years. We have transited from a second-option standby LNG supplier within the Atlantic Basin to a reliable global supplier beyond the Atlantic basin in Europe and Asia. Today, we are sought after by customers in South America, Asia, Europe, a truly outstanding achievement for a Nigerian Company,” he stated.

    Omotowa said the company is currently supplying over 80 per cent of Liquefied Petroleum Gas (cooking gas) locally and recently increased its dedicated volumes by 67 per cent and are prepared to increase by 1000 per cent to get more Nigerians to switch to cooking gas rather than continue to use fire wood and Kerosene, alternatives that have environmental and health disadvantages.

  He however identified the challenge to include the evolution of Shale Gas and the intrigues of the Petroleum Industry Bill (PIB) among others.

  “So we are analysing the global trends including shale gas competition, new mega LNG plants in Australia and East Africa threats to our business. For example the technological improvements to shale gas extraction has doubled the world reserves in LNG and in the US has led them from changing from an importer to a likely exporter and Henry Hub gas prices has fallen by more than 85 per cent from $15/mmbtu in 2005 to less than $4.50/mmbtu today. 

   “These global challenges are not made easy by the local challenges from the uncertainties of policy changes, delayed passage of the Petroleum Industry Bill (PIB), gas developments for domestic use, sustaining feed gas supply, ageing plants and ships, and continued tension between a Nigerian culture and a world-class culture.

   “So we are already looking at what we need to do differently from growing our volumes by the addition of a seventh train so we can compete with volume in the global market and use that to offset any reduced prices.” he said.

    Culled from http://www.ngrguardiannews.com/business