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NIMASA detains three NLNG ships over levies

By on June 26, 2013

Nigerian Maritime Administration and Safety Agency has issued a ship detention order to the Nigeria Liquefied Natural Gas Limited, NLNG, halting gas exports and detaining three of its vessels.

According to a statement by Kudo Eresia-Eke, spokesperson for NLNG, the action is a flagrant disregard of a court order, stating that its vessels, LNG Enugu, LNG Oyo and LNG Imo, were barred from accessing or leaving the company’s loading bay.

“The potential implications of this current action by NIMASA on Nigeria LNG operations are enormous and would impact negatively on its international LNG buyers,” she said.

NLNG said it paid about N3.2 billion in outstanding levies to NIMASA under protest and filed a suit on June 18 against the agency to seek judicial clarity and interpretation on the legality of the levies

NLNG was directed on May 18 to pay outstanding levies to NIMASA after a state arbitration panel ruled the operator of Africa’s biggest liquefied natural gas export terminal was not exempt from taxes.

NIMASA blockaded Nigeria LNG’s Bonny Island loading bay May 3, forcing it to halt exports before they resumed on May 5 after government intervention.

The law that set up the NLNG exempted the company from paying taxes for 10 years or until the cumulative price of liquefied natural gas reached $3 for a million British thermal units. NIMASA said this tax break expired in January 2004 after gas prices reached $9 a million British thermal unit on Nymex.

The Bonny Island plant is able to produce 21.7 million metric tons of chilled gas a year, or about 8 percent of the world’s total, according to data from the International Group of LNG Importers. It supplied 12 percent of the world’s LNG for near-term delivery in 2011, according to the group.

Nigeria LNG has long-term contracts with buyers in Spain, Italy, France and Turkey, exporting 333 cargoes in 2012, the most since sales began in 1999, according to its website.

Nigerian National Petroleum Corporation is the biggest investor, with a 49 per cent stake. Units of Royal Dutch Shell Plc, Total SA and Eni SpA respectively hold 26 percent, 15 percent and 10 per cent.

 

 

[Vanguard]