Bloomberg News

Nigeria LNG Bay Is Blockaded by Maritime Agency Halting Exports

June 22, 2013

Nigeria LNG Ltd. said the country’s maritime regulator issued it a ship detention order today, halting exports and detaining three of its vessels in “flagrant disregard” of a court order.

“The potential implications of this current action by Nigerian Maritime Administration and Safety Agency on Nigeria LNG operations are enormous and would impact negatively on its international LNG buyers,” Kudo Eresia-Eke, an Abuja-based spokesman, said in an e-mailed statement. Nigeria LNG vessels, LNG Enugu, LNG Oyo and LNG Imo, were barred from “accessing or leaving the company’s loading bay.”

Nigeria LNG was directed on May 18 to pay outstanding levies to the Nigerian Maritime Administration and Safety Agency, or Nimasa, after a state arbitration panel ruled the operator of Africa’s biggest liquefied natural gas export terminal wasn’t 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.

Nigeria LNG said it paid $20 million in outstanding levies to the maritime regulator “under protest” and filed a suit on June 18 against the agency to seek “judicial clarity and interpretation” on the legality of the levies.

The law that set up Nigeria LNG 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.

Overseas Contracts

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.

State-run Nigerian National Petroleum Corp. is the biggest investor, with a 49 percent stake. Units of Royal Dutch Shell Plc (RDSA), Total SA and Eni SpA (ENI) respectively hold 26 percent, 15 percent and 10 percent.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net


Soul Searcher
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus