EGTL project is a 120,000 bpd gas project located in Delta State.
An ad hoc committee of the House of Representatives has queried the increase in the cost of the execution of the Escravos Gas-to-Liquids (EGTL) project from $2.9 billion to $10.7 billion.
The committee, investigating the Joint Venture of the NNPC limited, issued the query on Tuesday when Chevron Nigeria Limited appeared before it.
The Managing Director of Chevron Nigeria, Rick Kennedy, and other officials of the company appeared before the committee.
The Chairman of the Committee, Hassan Fulata (APC, Jigawa), questioned the Chevron delegation on the reasons for the review of the cost of the project from $2.9 billion to $10.7 billion.
EGTL project is a 120,000 bpd gas project located in Delta State.
Mr Fulata disclosed that a similar plant was built in Qatar for less than $2.5 billion within a very short period.
He also stated that NNPC Limited had protested the cost review and demanded a value-for-money audit.
Responding to the question, Monday Ovuede, Chevron's Director of JV, said several factors caused the upward review of the cost of the project from the initial $2.9 billion to $10.7 billion.
On the Qatar project, Mr Ovuede said the project was built in an industrial complex with a seaport and access to an international airbase.
He added that there was access to skilled labours compared to Nigeria, but such skills were hard to come by.
"The plant in Qatar is built in an industrial complex close to a seaport and there is an international airbase there. It has access to skilled labour from Europe. When you come to our side, we try to build--for some of the technology, we had to develop the local labour to the level required to implement the project," he said.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Speaking further, Mr Ovuede explained that immediately after the project was signed, prices of commodities like oil and steel went up, necessitating an upward review of the project.
He added that Chevron agreed to a value-for-money audit despite not having it in the contract for the project.
"This is a very complex technology to be executed in this part of the world. When project construction started in 2005-- coincidentally, if you check the record, commodity prices, including that of oil and steel, started rising in the international market.
"The project was given as engineering, procurement and logistics, which means the sum was fixed. In the course of executing the contract, the contractors came back," he said.
The explanation by Mr Ovuede did not satisfy the lawmakers, who protested the response.
Ibrahim Isiaka (APC, Ogun) moved a motion for Chevron to submit a written response justifying the increment.
In addition, Mr Fulata also accused Chevron of claiming capital allowance for the project without capital importation or a certificate to make such a claim.
Consequently, the committee directed Chevron to appear again next Tuesday with relevant documents to defend the issues raised.
