N18.4bn compensation directive rattles NLNG

By Maduabuchi Efegadi 

A resolution by Nigeria’s upper legislative chamber, the Senate, directing the Liquefied Natural Gas company (NLNG) to pay N18.4 billion as compensation to its host communities, has rattled the gas liquefaction company.

The resolution was a consequence of a petition relating to compensation for the acquisition of a Right of Way (RoW) across some communities, and passed by the Senate, following the consideration of a report by its committee on ethics, privileges and public petitions.

Details of the legislative resolution on the particular communities were not immediately available to Business A.M. The Bonny communities are NLNG’s core hosts.

The gas company, which is building a $7 billion Train 7, appeared quite flustered as it said that it “has always conducted its business responsibly and in accordance with the laws of the Federal Republic of Nigeria, including in this specific matter.”

According to Andy Odeh, NLNG’s general manager, external relations and sustainable development, the company’s attention was drawn to the resolution; and it was “evaluating the resolution and circumstances surrounding it”.

NLNG, a Nigerian global gas liquefaction company, is being drawn out again for possible public scrutiny over alleged infraction, only months after it had denied being complicit in the Nigeria multi-billion-dollar oil thievery.

Last August, the gas liquefaction company denied being part of a $1.2 billion oil sleaze involving certain Nigerian companies in collaboration with some corrupt government officials. Rather, it claimed that its gas shipment complies with all regulatory requirements for export of its products, and are made under various LNG sales contracts to destinations not limited to Europe, but also to the Far East, greater Middle East, North America and South America.

In March 2021, the Bonny Kingdom Local Content Compliance Committee (BKLCCC) accused NLNG’s Train 7 and its contractors of non-compliance with its core host’s participation in the construction of the multi-billion-dollar project, especially in the handling of engineering, procurement and construction (EPC) of the Train 7 project.

Specifically, BKLCCC accused Saipem, Chiyoda and Daewoo joint venture (known as SCD JV) to have decidedly side-lined its (BKLCCC’s) selected contractors for local participation as they kickstarted the project’s early works and tie-in.

The BKLCCC, which operates in tandem with the Nigeria Content Development Monitoring Board (NCDMB) was constituted by Edward Asimini William Dappa Pepple III, the king, Amanyanabo, Natural Ruler and Perekule XI of Bonny Kingdom. The monarch lamented in March last year, that NLNG’s Train 7 was yet to respond to the body after receiving a list of local contractors to the NCDMB to participate as the project’s local content.

“We wonder where the NLNG and its contractor, SCD JV intends to source local contractors from. It is a thing of worry because for one year and four months since the BKLCCC sent in its list of indigenous contractors and their partners to NLNG for verification, more than half of the companies on the list are yet to be contacted to upload their documents for verification; and till date no verified list of indigenous contractors and their partners has been forwarded to BKLCCC and SCD JV,” the monarch had said.

Bonny Kingdom, an island community in Rivers State which saw early trades with European explorers some 150 years ago, is the ‘core host’ of NLNG’s massive gas liquefaction plant at Finima. Other major facilities are the gas company’s water-wells, the residential area in Abalamabie.

In July this year, the gas company, in answer to corporate social responsibility issues, said it was driving its CSR by developing infrastructure, empowerment, health and education for the whole country, but its host communities in particular. That, it was looking to the future via harnessing prospects for a sustainable outlook.