Nigeria LNG Train 7 project could be at risk if the state lawmakers amend the 1989 law that enabled the creation of the NLNG partnership.
The company’s CEO Tony Attah told Reuters that the LNG export partnership between the state-owned Nigerian National Petroleum Corporation, Shell, Total and Eni, could face taxes equivalent of about 3 percent NLNG’s total budget if the law is amended.
Under the 1989 law, LNG exports from the facility on Bonny Island to Europe and Asia are exempt from the tax, and provided government guarantees enabling private investment.
If the law is amended, the Train 7 would not be built as the amendments would erode value, not allowing the company to grow, Attah said.
NLNG is in the final stages of deciding on the investment in the project that would cost about US12 billion. The addition of the seventh liquefaction train would up the plant’s export capacity from the current 22 million tons per year to 30 million tons of LNG per year.
The law amendment comes at a tie when the Nigerian government is looking to find ways to fund its budget amidst a recession caused by the effect of low oil prices on the government’s revenue.
LNG World News Staff