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NLNG says Ribadu’s report is ‘grossly erroneous’

Nigeria Liquefied Natural Gas (NLNG) Company has denied key findings in a government-commissioned probe into the country’s oil and gas sector, which accused the firm … Continue reading NLNG says Ribadu’s report is ‘grossly erroneous’


Nigeria Liquefied Natural Gas (NLNG) Company has denied key findings in a government-commissioned probe into the country’s oil and gas sector, which accused the firm of paying below market prices for gas supplied to its 22mn tonnes per annum plant and that it owed $29 billion to the Federal government for this gas.

The report by the special task force on petroleum revenue led by a former Chairman of the Economic and Financial Crimes Commission (EFCC), Nuhu Ribadu was received by President Goodluck Jonathan last Friday.

But NLNG, whose shareholders are the Nigeria National Petroleum Corporation (NNPC), Shell, Total and Italy’s Eni, rejected the report’s findings on its operations.

“This report is inaccurate and the allegation grossly erroneous,” NLNG said.

“It is an error to compare the price of raw material (natural gas feedstock) to that of finished product (regasified LNG). It is even worse to declare the difference as losses or cut down rates. This sort of comparative economic analysis is simply bizarre. It fails to recognise the intensive production-liquefaction costs, the shipping costs, the regasification costs, taxes and levies and other ancillary charges,” the company added.

NLNG said it had paid over 300pc of the going rate of gas in Nigeria during the period under review.

The price that NLNG bought gas from producers is a “netback price”, which since 2008 has been between 26pc and 36pc of the weighted prices it obtains from the sales of its products in various regions in the world. This price level compares well across LNG plants globally and reflects the capital-intensive nature of the liquefaction process and shipping costs, NLNG said.

NLNG currently pays over $2 billion per annum to the Federal government in various taxes.

The firm did back the report’s recommendations that more LNG trains should be built in the country, including the seventh train at the current plant on Bonny Island.