NIMASA Boss Celebrates Berth Of Largest Container Vessel In Nigeria, Lauds NPA MD

USTDA Provides Support For New LNG Infrastructure In Nigeria

By Emeka Enunwa

NIMASA Boss Celebrates Berth Of Largest Container Vessel In Nigeria, Lauds NPA MD.

Nigeria Becoming a Sub-regional Hub- Jamoh

The U.S. Trade and Development Agency (USTDA) has awarded a grant to Nigerian natural gas supply company, Green Liquified Natural Gas (GLNG) to support Nigeria’s increased utilization of natural gas for power generation, local industry and additional economic growth.

“This project will support the diversification of Nigeria’s economic d e v e l o p m e n t w h i l e c r e a t i n g opportunities for U.S. companies to develop world-class infrastructure,” said Thomas R. Hardy, USTDA’s Acting Director. “It will also build upon USTDA’s commitment to working with our partners in Nigeria to develop and expand the country’s natural gas options.”

Specifically, USTDA’s grant will assess the viability of an LNG liquefaction and distribution facility and associated regasification and distribution stations in Southwestern Nigeria. GLNG selected the U.S. company NOVI Energy LLC to conduct the study.

“We are proud to announce our pathbreaking LNG project in Nigeria, which will have a significant impact on Nigeria’s goal of pursuing a sustainable, environmentally friendly, alternate fuel-based economy,” said Mr. Anil Ahluwalia, Director of GLNG. This project supports the U.S. government’s Prosper Africa, Power Africa and Doing Business in Africa Initiatives.

Th e D i r e c t o r General of the Nigerian Maritime Administration and Safety Agency, Dr. Bashir Jamoh has expressed his delight over the safe and successful arrival of what is now the largest container vessel to berth in any port in Nigeria. Stressing that this development will enhance the nation’s maritime competitiveness in terms of tonnage capacity and sub-regional hub status attainment, the DG noted in his phone remarks to Maritime Info shortly after the agency’s management retreat in Lagos, that this achievement was long overdue given Nigeria’s vast maritime potentials. At exactly 1630 hrs, on Saturday the 15th of August , the MAERSK STADELHORN, a 300 mtrs Container Vessel safely berthed in Onne Port for her first voyage to Nigeria.

Jamoh also commended the Managing Director of the Nigerian Ports Authority, Hadiza Bala Usman for her sterling leadership and management prowess, especially in providing the best in class professional support for the NPA pilots and mariners who were crucial in delivering on this major milestone of positioning Nigerian ports as sub-regional hubs for the entire marine environment of the Gulf of Guinea.

Samsung To Employ ICT Tools To Improve Shipbuilding In Nigeria

By Ikenna Omeje

Samsung Heavy Industries (SHI) has said it is aiming to adopt Cloud, Big data and Internet of Things (IoT), among other advance technological tools to improve shipbuilding and operation methods in Nigeria.

The company made this known in a statement on its official website. It said, “The company aims to use Cloud, Big Data, and loT, among other advanced tools, to make shipbuilding and operations on the fabrication and integration yards smoother and smarter.

The technologies to be implemented will facilitate more efficient ways of working, lowering the cost of operations, increasing safety, and modernising the shipbuilding industry in Nigeria. Sustainable method of production, based on digital modes of operations, is the need of the hour as every country

makes its move towards energy transition.”

It further noted that Innovations currently being worked on have the potential to bring about radical changes in the shipping industry, fostering the use of eco-friendly technology, a switch to digitised management and self-reliance on inspection for offshore engineering and more. The Managing Director of SHI, Jejin Jeon, said the company has identified Nigeria and the West Africa sub-region as an emerging market with an abundance of opportunities.

“Our investment in West Africa is a long term one, rooted in helping develop local human capacity by leveraging our fabrication and integration yard to the benefit of the entire West African maritime industry. The new and modern ways of working will not only empower Nigerian maritime industry, but is a promising opportunity for the country’s youths who will receive hands on training in these necessary tools of smart working that are soon to become the norm in every industry in the near future,” he said. Jeon stressed that Samsung believes in having big dreams and visions for the future and following them with passion. Given that the present and near future is digital, it is high time the shipbuilding industry started digitising its ways of working.

“We are looking forward to introducing these innovations to truly transform our ways of working in a complex industry such as shipbuilding. We remain committed to ensuring that our relationship with the Nigerian community remains strong by continuing to train local staff in technical vocational skills,” he said.

NPA Halts Licences Renewal For Shipping Firms Over Holding Bay Crisis

By Esther Mordi

(NPA), has stopped the renewal of licences for shipping firms who fail to provide holding bays for empty containers. Failure of the shipping firms to establish a holding bay where empty containers are to be stacked is a major factor for the congestion currently being experienced at the ports. The Managing Director, NPA, Hadiza Bala Usman, who confirmed this during the 14th yearly, Business Law e-conference, said: “We actually refused to renew licences to shipping companies; they have to give evidence of having empty container holding bays that is commensurate with the vessels they bring in. “I encourage stakeholders to write directly to us to the extent that you identify issues affecting this procedure, and I will also push that in our system to ensure there is adequate monitoring. “I will get our team to get back to you by next week so that we can ensure that the shipping companies adhere to what was agreed in terms of maintaining the balance between what is coming in and what is going out. Bala Usman also advocated for an intermodal system to ease the movement of cargoes, and attributed the incompletion of the rail project to the COVID-19 pandemic. “I think there is a need for us to recognize the need to use intermodal transportation systems. You can’t have 90% of your cargoes being moved through the road alone; the road will get congested and will be spoilt. We must strengthen the utilisation of inland waterways. We must drive and have our rails system concluded; if not for the COVID-19, we would have concluded our rail connectivity,” she said. She also bemoaned the dearth of truck parks, stressing the need for designated places for trucks to stay and wait for call-up, saying: “If we don’t have designated places for trucks to wait and only to wait for a call-up, the trucks will just wake up and drive to the ports. “Lagos State Government must take ownership in providing dedicated truck terminals, where there will be linkage and a callup with the terminal operators at the ports. But when we have 36 No truck locations all around the Apapa environment, how do you think you are going to sanitize the area? In the Apapa environment, we have 36 truck parks that lack any form of equipment. I have always advocated for us to have larger truck parks that are outside of the port environment, dedicated for that purpose and only come when

Hadiza Bala Usman

The Nigerian Ports Authority

we are using the call-up system. “Nigerian ports are not responsible for providing truck terminals. What we know is that truck parks are local government issues, it is a Lagos State issue, so Lagos State Government must rise up to that and provide those parks,” she said.

She added that to ease the situation, NPA had converted its Lilypond Terminal to a Truck Park, while arrangements are ongoing with Lagos and Ogun State governments to provide more truck parks. Agreeing with Usaman, the Managing Director, Connect Rail, Edeme Kelekume, said: “There is no bigger word to describe the crisis we are going through with empty containers. The cost implication is running into billions of naira. The demurrage cost is too high and beyond what smaller players, especially the small and medium enterprises can handle. “Having access to where you can keep your empty containers is one thing, and the holding bays around the ports are not enough, so there is a need for more holding bays.

“The infrastructure at the ports are not adequate, and this is also a challenge, as you don’t know how you can quickly be attended to and nobody is addressing the losses that are incurred. The Shipping lines must be compelled by the NPA to comply and provide holding bays,” he said.

NIMASA, Customs Collaborate To Plug TIP Loopholes

By Jerome Onoja

Col. (rtd.) Hameed Ali (r) with Dr. Bashir Jamoh

Th e N ige ria n M a ritim e Administration and Safety Agency, NIMASA, and the Nigeria Customs Service, NCS, have agreed to join forces to close loopholes in the Temporary Importation Permit, TIP, system that importers often exploit to avoid levies due to the government. DirectorGeneral of NIMASA, Dr. Bashir Jamoh, stated this in Abuja recently, when he visited the ComptrollerGeneral of Customs, Col. Hameed Ali (rtd). Jamoh said the temporary import permit issue was one of the biggest challenges faced by the maritime sector, stressing that it has denied the Federal Government huge revenue.

Ali spoke in a similar vein, saying it is important for the NCS and NIMASA to develop a common platform for dealing with problems arising from the TIP. Jamoh stated, “The biggest issue we have has to do with temporary importation. What we observed is that people capitalise on the good gesture of government policies. “Those that are benefiting from this temporary importation bring in their own ship and after one year they will take it back to their country and import back with a different name.

“They do it constantly and this is to the disadvantage of our Nigerian shipowners.” He said Cabotage trade, which falls within the core functions of NIMASA, was suffering as a result of the abuse of the temporary import permit, and, “At the end of the day, it is indigenous shipowners that bear the brunt.”

The Director-General said the Merchant Shipping Act provided that vessels used in importation should be registered with the Nigeria Ship Registry, but in most cases, the importers did not. He called for greater synergy between NIMASA and NCS, and indeed, all agencies in the maritime sector, to address pertinent issues and improve the sector. Jamoh said it was in pursuit of such cooperation that a regular meeting of heads of maritime agencies was recently initiated. The meeting debuted on July 7 in Lagos at the Nigerian Shippers Council (NSC). It had in attendance Executive Secretary of NSC, Mr. Hassan Bello; Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala Usman; Managing Director, National Inland Waterways Authority (NIWA), Dr. George Moghalu; and Rector, Maritime Academy of Nigeria, Oron, Commodore Emmanuel Effedua (rtd). Jamoh said the essence of the meeting was to identify and speedily tackle challenges faced by operators in the sector without the impediments of official bureaucracy. He invited the NCS Comptroller-General to join the heads of maritime agencies meeting.

“After the meeting, we decided to incorporate the Freight Forwarders’ Regulators to be on board,” Jamoh stated, adding, “The MD NPA and I have both agreed to extend the fellowship to you and you have the liberty to join us via zoom.” Jamoh appreciated the efforts of the NCS under Ali to curb smuggling in the country and enhance revenue generation. Responding, the Comptroller-General of Customs pledged the commitment of the service to pooling resources with NIMASA to address the TIP issue and other problems in the sector. He said there was need for both agencies to design a common framework for tackling the issues. Ali said such approach would ensure that if Customs registered a ship and gave it a TIP, NIMASA would also have records of that registration on its own platform. According to him, “We should have more identity of the ship beyond the name, as name can be erased and another name used. We must now collectively get some identity of the ship that goes beyond name that should be registered in our records and yours so that if there is recycling of the ship, using that platform, we should be able to identify the ship and be able to apply the law as it is.

“We should create that synergy based on ICT. I request that your IT staff synergise with ours to develop a platform that will create that collaboration, such that everything we record or register will reflect in your own record.”

The Comptroller-General said the Customs was in the process of launching two patrol boats that would go beyond the creeks, to enhance maritime security. “We have mounted the necessary machine guns, one had an accident but it has been repaired, and very soon we will launch them into operations,” he said. “We will keep you posted as we intend to synergise with you to ensure the safety of our waterways,” Ali added.

He also stated, “It is my hope that we will strengthen the relationship and increase the synergy between us as maritime operators, and, most importantly, to ensure that not only the revenue aspect of it is improved, but also to secure our waters. “The security of our people is more important than the revenue, because no matter how much you collect, if our people are not settled, or not in peace, then the whole essence of the revenue is bastardised. “So it is our hope that we join hands with you and make sure that we work assiduously to ensure that our waterways are safe and profitable.” Ali commended the NIMASA Director-General for the CEOs’ forum initiative, saying it would help to boost the sector.

Maritime Agencies Adopt Modalities To Address Overlapping Functions

By Jerome Onoja

L-R: Director General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh , Managing Director, Nigerian Ports Authority (NPA) Hadiza Bala-Usman (middle), Executive Secretary, Nigerian Shippers Council, Barr. Hassan Bello, during the Maiden Meeting of Heads of Government Parastatals in the Maritime Sector.

Parastatals under the Federal Minis tr y of Transp or tation have agreed on modalities for handling areas of overlap in their responsibilities. DirectorGeneral of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, disclosed this in Lagos after a meeting of heads of the parastatals at the headquarters of the Nigerian Shippers Council (NSC). Jamoh said the agreement followed the work of a ministerial committee, stressing that meetings like this are necessary to build synergy and create the right atmosphere for the overall progress of the economy.

He stated, “We have held the inaugural meeting for improved synergy and we hope to hold it on a monthly basis for the next four months. Due to the proximity of our corporate headquarters to each, a lot of gains will be achieved in a short while without the usual official bureaucracy.”

The Director-General added, “From our discussion and deliberations, we have decided on so many issues that concern national development, overlapping functions, and others.

“We have a committee inaugurated by the ministry of transportation and we have been working for close to a year now. We have now decided on who should take what responsibility and we are going ahead with that.”

He said there was no better time to improve synergy among agencies under the Federal Ministry of Transportation than now, “When the COVID-19 pandemic and the accompanying disruptions to business and economy have placed a great deal of responsibility on the maritime sector as a vital support to the economy and key medium for the movement of essential supplies.

” Those who attended the meeting were Executive Secretary of NSC, Mr. Hassan Bello; Jamoh; and Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala Usman. Managing Director, National Inland Water ways Authority, Dr. George Moghalu, and Rector, Maritime Academy of Nigeria (MAN), Oron, Commodore Duja Effedua (Rtd), joined via Zoom.

Azura Power Deal: Nigeria Not Liable To Pay $1.2bn – Presidential Aide

By Ikenna Omeje

The Special Adviser to the President on infrastructure, Ahmed Zakari, has said that Nigeria is not liable to pay $1.2 billion according to the agreements signed before the takeoff of the 461 megawatts Azura power plant in Edo state. Based on the agreement, Nigeria is obligated to pay Azura $30 million monthly with or without power being taken from the generation company, which has placed a heavy financial burden on the country. There is assertion in some quarters that if the country wants to exit from the contract, it will have to pay Azura an estimated $1.2 billion and take over the plant. “Over the past week, there has been an unnecessary controversy about the Azura-Edo Independent Power Project (IPP) especially the concerns about who signed the transaction documents and who did not sign, thus ignoring the consequences of backing out of the agreements by the Federal Government,” he said. “The Azura-Edo IPP is a functional 461MW power plant. It is owned by a group of investors led by an internationally reputed firm – Actis and includes the Edo State government as part of the investment consortium. Today, the plant supplies over 8% of the power on Nigeria’s National Grid. Clearly, the controversy as to who signed the agreements has no real basis, if indeed the only quest is for the plain truth. “Since the Buhari government had chosen not to repudiate the deal, it went ahead to issue the required legal opinion and signed the World Bank guarantees that had been initiated in April 2014. In fact, the main Power Purchase Agreement was signed in 2013. “If at the point the Buhari government came into office, it repudiated the contracts, what would have happened? First, because there was already a valid and binding contract between the Federal Government and Azura-Edo, that would have led to an international case similar to the P&ID scenario. “In the P&ID case, the Federal Government was sued for breaching the terms of a contract to build a gas processing plant. Despite the fact that no part of the plant was ever built and no government or World Bank guarantees were given, the Arbitral Tribunal found Nigeria liable in the sum of $9.6 billion. So, clearly, guarantee is not the issue at stake here,” Zakari said in a statement on Thursday. He added: “Third, it would definitely have affected our credit rating and credibility as an investment destination. Some of the most reputable international banks and investors that were involved in the project include Development Finance Institutions of the US, UK, France, Germany, the Netherlands and Sweden,” the presidential aide said. “Again, laying out the facts already stated in previous communication about this matter, there is no doubt at all that the binding agreements which brought about the plant were signed in 2013 and 2014. On April 22, 2013, the Power Purchase Agreement was signed. “This is the contract that contained the Take or Pay clause, which is now the crux of the manufactured controversy. That clause is however standard in PPAs. What it says is that government will pay for the energy produced by the plant, whether it uses it or not. Without that assurance, nobody would invest money in such a huge power plant. Large infrastructure projec t s are executed using project finance principles and debt, guarantees of repayment are always

needed to reach financial close. “On October 22, 2014, the second agreement was signed. That is the Put Call Option Agreement (PCOA), which establishes the formula for determining the amount payable by government, if it has to take over the Plant. The PCOA for power plants is actually a novel approach pioneered in Nigeria. It ensures that unlike other contracts where a contract default would trigger penalties alone, in the case of Azura a default would allow Nigeria to purchase the asset. This ensures that the country has a contingent asset alongside a contingent liability.

The PCOA approach has now become standard in West Africa and is being adopted across the developing world. “Those who argue that the signing of the World Bank Guarantees makes the Federal Government under Buhari responsible for contracting Azura need only to look at the two basic transaction documents. Another curious mischief in this controversy is the assertion that Nigeria will become liable in the sum of $1.2billion if it defaults on the Azura contract.

“Nowhere in any of the documents signed from 2013 to 2015 is any such figure mentioned. The only possible payout indicated in any of the agreements is in case the put and call option is activated. In that event, the cost of the plant would be worked out using a formula and become due for payment, but at least Nigeria will get in return a functional 461MW plant.”

Nigeria to Deliver 5GW Of Electricity By 2022 – NNPC

By Daniel Terungwa

With the kick-of f of the construction of a number of gas projects, particularly some major pipelines, the Nigerian National Petroleum Corporation (NNPC), said it will deliver about 5GW or 5,000 megawatts power by 2022. Since the privatization of the power sector in 2013, Nigeria has struggled to achieve sustainable electricity supply, but has been frustrated by the shortage of gas to power the plants as well as slowing the nation’s industrialisation and gas monetisation drive. NNPC hinted that the new generation capacity would be boosted by additional 5 billion cubic feet of gas daily by 2022, while also exploring partnerships for transmission and investments to enhance evacuation and power improvement.

This was made known at a webinar, recently, where stakeholders, who gathered for the Nigeria International Pipeline Technology & Security (NIPITECS), strategized on ways of reducing cost in the industry, insisting that the development of pipelines is critical to harnessing the nation’s oil and gas resources. NNPC’s Chief Operating Officer, Gas and Power, Yusuf Usman, said during the webinar that with the expected delivery of NLNG Train 7 by 2024, the Federal Government is working on the completion and inauguration of the Escravos–Lagos Pipeline System (ELPS) I, and B3 gas pipelines to ensure connectivity between the Eastern and Western parts of Nigeria. Usman also noted that the construction of the AjaokutaKaduna-Kano, and two other gas pipelines, will ensure gas availability in the Northern part of Nigeria and interconnectivity within the East. He said some midstream processing facilities like the ANOH Gas Plant will guarantee gas supply to the domestic market, as the country pursues the actualization of the Seven Critical Gas Development Projects (7CGDP), to deepen the penetration of its gas resources, notably, LPG, CNG and virtual LNG in-country.

According to him, the country would also secure and market the Nigerian Petroleum Development Company Ltd. (NPDC) joint venture portion and Production Sharing Contract (PSC) gas volumes, while pursuing the development of gas-based industries like the Brass Fertilizer project. Usman further said NNPC is looking to engage the Transmission Company of Nigeria (TCN), and generation companies (GENCоs), to execute partnership agreement or framework for expanding the nation’s transmission network Stressing the need to unlock power plants both existing and new, he said Nigeria would focus more on the regional market through the West African Gas Pipeline (WAGP), Trans-Saharan Gas Pipeline, among others. Noting that about half of Nigeria’s population live in rural areas that could not be economically supplied with gas via conventional gas pipeline, Usman raised the hope for virtual supply using mini-LNG/ CNG trucks to supply gas to remote demand centres.

According to him, the move would stimulate socio-economic development, lower government import bills on white products, and promote sustainable energy and indigenous energy resource to power the economy Also speaking, the Group Chairman of Oilserv, Emeka Okwousa, said except Nigeria focuses on expanding pipeline networks, especially with financing models that won’t put pressure on the government, driving the needed investment for exploration of hydrocarbon resources may remain unattainable.

While noting that there is insufficient pipeline infrastructure to support the domestic gas market aspiration in Nigeria, Okwousa insisted that “pipeline infrastructure deficit is a key disincentive to FID for upstream gas.” He said while Nigeria holds the 11th largest oil reserves as at 2019, and the ninth largest natural gas reserves, there was a need for investment in the sector, as exploration of gas fields are mostly associated gas. He said security of the pipelines remain critical, adding that just like the AKK pipeline where Supervisory control and data acquisition (SCADA) is being deployed to monitor the pipelines, there was the need to create awareness on the nature of gas as well as engaging local communities to protect the assets.

Chairman of Pipelines Professionals Association of Nigeria (PLAN), Geoff Onuoha, noted that pipelines remained critical assets to the nation. Onuoha said pipeline development has become more critical to Nigeria going by the current push for gas development, while urging a cost effective approach to building and maintaining pipelines. He added that local participation, innovation, environmental and social dimensions are critical considerations the country must prioritise in developing the infrastructure.