3 May 2013

Nigeria: Gas Exports in Danger Over Levy Wars

The Nigerian Maritime Administration and Safety Agency (NIMASA) triggered a major trade dispute Friday in Bonny Island, blocking access to the nation's major loading terminals for gas export, authoritative security sources have disclosed to PREMIUM TIMES.

NIMASA's action took place about noon, and its grouse, according to sources, is based on alleged refusal by the Nigeria Liquefied Natural Gas (NLNG) Company to pay the statutory 3% levy of every freight entering or leaving the country through the nation's territorial waters.

Security sources say details are still foggy in the conflict between the maritime regulator, and the NLNG Company, but they are quoting NIMASA officials as saying the "NLNG has never paid this statutory charges thus building huge backlogs in debt, and so denying the nation massive revenue." Oil and gas experts say this can cost the NLNG "billions in revenue."

Bonny is home to Nigeria's liquefied natural gas and PREMIUM TIMES gathered on Friday that several consignments of exports, mostly gas shipments by the to various parts of Europe, may be affected the most by the decision to block the loading bay used by the company for its export operations.

NIMASA ACT 2007, which established the agency as the apex regulatory and promotional maritime institution in the country authorizes the imposition of a mandatory levy of 3 percent on grass freight of shipment of imports or exports into or out the Nigerian waters.

However, it was gathered that the NLNG is one of several government companies operating in the area that have consistently refused to comply with the law the payment of the levy, despite several demand orders.

To compel NIMASA authorities to vacate its decision, it was gathered that top officials of both NLNG management and Shell Petroleum Development Company (SPDC) have been making frantic contacts with the Presidency to secure the intervention of President Goodluck Jonathan in view of the dire economic implications of the decision on the country's export revenue earnings.

The NLNG operates a tight export schedule on its long-term gas contracts to its customers in Europe. Failure to deliver on schedule on the contract might attract huge costs.

NLNG management did not immediately respond to calls from our reporter for the company's reaction to the development.

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