Nigeria's deliberately limited oil refining capacity

25 Finance Again, states tackle FG over oil funds 2013 October, SweetcrudeReports

Oil worker

SAM IKEOTUONYE

O

nce again, the states are at the jugular of the Federal Government over oil funds. It is becoming a recurring decimal in the relationship between the two, no thanks to the nation's dwindling oil revenue following the decline in US call on the Nigerian crude and the global emphasis on shale gas. State governors are miffed at the effrontery of the Ministry of Finance and its non-remittance in full of funds due the states for three months.

Finance commissioners from the 36 states of the federation were in Abuja late September for a share of their states' statutory revenue allocation from the Federation Account. This

was not to be as a shortfall of N75 billion from the last month’s revenue which could not be taken care of by expected funds from the Nigerian National Petroleum Corporation, NNPC, made that impossible.

Supported by their accountants generals, who were in toe for the big largesse for September, the commissioners rejected the N548.393 billion revenue put on the table for the month, claiming that NNPC must

offset an outstanding N75 billion before any move to start sharing the national cake could commence.

The rejection came despite spirited appeal by the Accountant-General of the Federation, Mr. Jonah Otunla, to the effect that the NNPC would be providing the outstanding N75 billion soon. Otunla presided over the Federation Accounts Allocation Committee, FAAC, meeting, the second to hold in September after

The Office of the AccountantGeneral of the Federation has received assurances from the NNPC that the issue will be dealt with with dispatch and a positive outcome is expected soon

an earlier one failed due to similar disagreement. “The Office of the Accountant-General of the Federation has received assurances from the NNPC that the issue will be dealt with with dispatch and a positive outcome is expected soon," the Accountant General of the Foundation, AGF, told the meeting as he pointed out that the revenue available for sharing was an improvement on the figures for the previous month.

This was unable to sway the states and it was on that account the meeting ended.

"Today, we have come for the second time within the month of September and the FAAC session ended in a stalemate. We were invited

by Minister of State for Finance who is the chairman of FAAC but we have not seen him," an obviously disturbed Mr. John Odah,

who is the chairman of the commissioners, told journalists soon after the meeting.

He added: "The AGF has addressed a few of our executives and told us nothing was available. We appreciate the efforts of the AGF but the minister has chosen the path of treating our case with levity. We have been slighted, to the extent that the interests of our states and local councils are suffering. He has treated us with contempt and treated our states and local councils with contempt.

"One condition we gave was that we should not be invited again until the situation improves. But right now, there is no improvement. We have demands, augmentations and differentials in benchmark which we listed."

2013 October, SweetcrudeReports

Finance

26

B

etween 2011 and 2012, the A f r i c a n Development Bank, AfDB, increased by a staggering 92% its investment in clean energy in Africa, according to a new report by Bloomberg New Energy Finance.

The publication looks at the clean energy transactions of 26 national and multilateral development banks from 2007 to 2012.

The AfDB now ranks 11th of out 25 on a list of development investors that is topped by Germany’s Kfw Entwicklungsbank, China Development Bank and the Brazilian Development Bank.

The AfDB’s investments had increased slowly but steadily from 2007 until last year, when they expanded exponentially.

Total AfDB investment in 2011 was only $769 million, as compared to $1.475 billion in 2012. In total, the AfDB has dedicated $4.3 billion to clean energy since 2007.

Kurt Lonsway, acting director of the African Development Bank’s C l i m a t e C h a n g e Department, expressed pride that, “in a few short years, the AfDB has become a major player in the global effort to develop clean energy. The need is particularly real in this region. Africa as a continent is in a distant fourth place behind Europe, Asia and Central and South America in terms of the total amount of clean energy investment. Thus it is crucial that the AfDB stay active in this area to keep the continent moving towards an

Renewable energy source

AfDB doles out $4.3bn to finance clean energy in Africa environmentally sustainable future.”

As documented in the report, the African Development Bank has been, by far, the largest source of financing for the Africa region providing $4.3 billion of the total $14.7 billion invested by development banks in the

region for clean energy projects since 2007. The World Bank Group was in second place with $2.9 billion.

In 2012, clean energy financing from development banks broke the $100 billion mark for the first time in history. The African

Development Bank has been keeping pace with this investment trend, specifically, but also in general in terms of its work on the environment.

In May 2010, the AfDB created its Energy, Environment and Climate Change Department to

FCMB commits $275m to power sector

T

he First City Monument Bank, FCMB, Group says it has committed over $275 million to the ongoing power sector reform as well as the value chain opportunities.

The bank’s Group Head, Project and Structure Finance, Capital Markets Limited, Mr. Robert Grant, disclosed this in Abuja, at a special forum titled: “Financing the Power Sector Reforms for Economic Development”, which was organised by the Central Bank of Nigeria (CBN) to showcase the N300 billion Bank of Industry-Power and Aviation Intervention Facility, BOI-PAIF, initiative which was launched in 2010.

According to him, the bank’s commitment towards providing the necessary

support to ensure the successful implementation of the ongoing reforms in the sector in line with its contribution towards national development.

He also noted that FCMB Capital Markets was actively involved in the ongoing Niger Delta Power Holding Company’s, NDPHC's, privatisation of its 10 National Integrated Power Projects, NIPPs, assuring of FCMB Group’s commitment to the power privatisation roadmap.

Vice President Mohammed Namadi, who also spoke at the event, acknowledged the support provided by the Nigerian banking industry to the power sector as he appealed for increased commitment towards achieving 20,000 megawatts, MW, of electricity generation

by the year 2016.

Sambo noted that reforming the power sector had become critical to developing the economy and that the federal government and other stakeholders, including the Bureau of Public Enterprise, BPE, were determined to ensure that the privatisation of the Power Holding Company of Nigeria, PHCN, was concluded on schedule and that the Roadmap for Power Sector Reform Programme was on course, stressing that all hands must be on deck to realise the 20,000 MWtarget.

FCMB was one of the first banks to access the BOIPAIF with provision of a N3.2 billion Term Loan Facility to Tower Power Utilities Limited, TPUL, for their 17.75 MW combined

cycle gas fired power generation plant in Otta Industrial Estate, Ogun State.

The feedstock is gas supplied by Shell through a pipeline, which terminates in the Ota Industrial Estate. Apart from s c h e d u l e d maintenance, the gas supply has been uninterrupted since inception. The plant provides power to several enterprises including but not limited to Aluminum Rolling Mills, Kolorkote Nigeria Limited, Eagle Packaging & Printing, Green Fuels, Dychem, Covenant University and Euro Global & Food Distilleries.

bring these three i nt e r l i nke d d i sci p l i ne s under one operational unit to deliver tangible results for the Bank’s regional member countries.

In particular, the Department manages climate finance instruments for the Climate Investments Funds, CIF, the Global Environment Facility, GEF, and the Sustainable Energy Fund for Africa, SEFA. The significant additional resources brought by these funds totaling $1.2 billion since 2010 allows the Bank to support innovative operations such as the Moroccan Integrated Solar and Wind Energy Programs or the Geothermal Development Project in Kenya which would otherwise be too costly and risky to materialize in the short term. In addition to financing, the Bank provides technical support for accelerating green growth.

Indeed, the African Development Bank’s 20132022 strategy has as its twin objectives inclusive and increasingly green growth.

In general, clean energy has enjoyed a big boost from development banks in recent years. Investments worldwide increased threefold from 2007 to 2012, from $36.8 billion to $108.9 billion.

2013 October, SweetcrudeReports

Finance

27

CBN reiterates ban on importation of foreign currency CBN Head office Abuja

T

he Central Bank of Nigeria, CBN, has reiterated the ban on importation of all foreign currencies except with approval.

This was contained in a statement by CBN Director o f C o r p o r a t e Communications, Mr Ugo Okoroafor, in Abuja. The statement said the move was sequel to the Bank’s withdrawal of the operating licence of 20 Bureaux de Change, BDCs. The CBN alleged that the BDCs purchased and sold huge sums of U.S. dollars with no documentation to show details of the transactions.

The statement quoted the Deputy Governor, Economic Policy, Dr Sarah Alade, as saying that the CBN frowned at the existence of strong foreign exchange demand pressure from domestic sources.

She said that the CBN had observed a surge in dollar cash importation by banks and the huge cash sales of the dollars to BDCs by the banks.

She disclosed that the purchase and sale of the cash were not adequately documented by the BDCs. Alade said that if the trend was not contained, it could pose grave threats to the value of the naira as well as the Nigerian economy which had gradually become dollarised.

She said the CBN

A circular has been issued mandating all deposit money banks to redeem all inward money transfers in naira to the recipients at the prevailing inter-bank foreign exchange rate. This is in line with best practice Governor, Malam Sanusi Lamido Sanusi, and his team decided to take immediate action to safeguard the naira and ensure its stability in the face of the aforementioned challenges.

Meanwhile, the CBN has also announced that the Retail Dutch Auction System (RDAS) would take effect from Oct. 2.

This followed the suspension of the Wholesale Dutch Auction System (WDAS) at the official foreign exchange market.

It said that the RDAS would allow only customers of deposit money banks to buy foreign exchange at the CBN through their banks.

This is against the WDAS where the deposit money banks bought foreign exchange at the CBN on their own accounts and in turn sold to their customers.

“The re-introduction of the RDAS is expected to prevent round tripping of foreign

exchange purchased at the CBN official window to unauthorised channels.

“Also, a circular has been issued mandating all deposit money banks to redeem all inward money transfers in naira to the recipients at the prevailing inter-bank foreign exchange rate. This is in line with best practice,” it said.

The statement said that apex bank would continue to support the operations of BDCs in line with existing guidelines, adding that BDCs were still relevant in the foreign exchange market.

“To guard against stifling the activities of the BDCs, the CBN has authorised all deposit money banks to deal at the official foreign exchange market rate. It also warned that banks can only sell foreign exchange cash to BDCs subject to a maximum of 250,000

dollars per week per BDC. “The CBN also advised all BDCs to continue to comply with the conditions of their operating licences, including the proper rendition of returns with respect to the purchases and sales of foreign

exchange," the statement added.

It said that the apex bank had assured members of the public of its commitment to maintaining price stability and the preservation of the value of the naira in accordance with its mandate.

NSE moves 412.35m shares worth N4.9bn

I

nvestors on the Nigerian Stock Exchange, NSE, traded a total of 412.35 million shares worth N4.9 billion in 4,449 deals on the last Thursday of September.

This was against the 396.43 million shares valued at N4.8 billion traded in 4,356 deals the previous day, Wednesday.

Also, the All-Share Index appreciated by 358.62 points to close at 37,266.68 from the 36,908.06 recorded the previous day.

Similarly, the market capitalisation, which opened at N11.708 trillion, grew by 0.09 per cent to close at N11.718 trillion.

Nigerian Breweries topped the price gainers’ chart by N1.40 to close at N169.40 per share.

Cadbury trailed with a gain of 93k to close at N47 per share, while GTBank gained 30k to close at N25.70 per share.

NAHCO appreciated by 23k to close at N6.30 per share, while Dangote Sugar grew by 20k to close at N11.20 per share.

On the other hand, Guinness led the losers’ chart by N10.66 to close at N256.04 per share.

OkomuOil followed with a loss of N2.17 to close at N41.53 per share, while Unilever shed N1.11 to close at N59.50 per share.

Presco dipped by 47k to close at N33.50 per share, while NASCON depreciated by 41k to close at N12.09 per share.

Labour

2013 October, SweetcrudeReports

28

Zungeru power project to create thousands of jobs —Okonjo-Iweala SAM IKEOTUONYE

T

he Zungeru hydro project in Zungeru, Niger State, will create thousands of jobs for engineers, technicians and artisans during its construction phase, according to Minister of Finance and co-ordinating minister for the economy, Dr Ngozi Okonjo-Iweala.

The Nigerian government recently signed a deal with Chinese companies for the building of the $1.3 billion power plant, expected to contribute in bringing to an end Nigeria's chronic electricity shortages that are a major brake on growth.

Nigeria produces only a few hours of electricity a day, forcing those who can afford it to rely on expensive diesel generators that drain billions of dollars from Africa’s second largest economy and discourage foreign investment.

“This project will create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase … It will also boost the

Okonjo-Iweala

economy,” Okonjo-Iweala said.

Nigeria produces only a few hours of electricity a day, forcing those who can afford it to rely on expensive diesel generators that drain billions of dollars from Africa’s second largest economy and

This project will create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase … It will also boost the economy

discourage foreign investment.

President Goodluck Jonathan is on a drive to increase investment in the power sector and has nearly completed the privatisation of its inefficient state electricity company.

According to Reuters, a loan from China’s Eximbank will pay for 75 per cent of the planned 700 megawatt Zungeru hydro-electric power plant, while the federal government has put up the rest of the cash.

The Zungeru power plant would be a boost to the country’s current 4,500 megawatt electricity capacity and is scheduled to be finished in four years, although Nigerian projects usually run over time and over budget and many are never completed.

The building of a hydro plant in Zungeru, Niger State, was first announced three decades ago but this is the most significant effort yet to get the project underway, experts say.

Despite holding the world’s ninth largest gas reserves, Nigeria only produces a 10th of the amount of electricity as South Africa for a population three times the size.

Protests mark govt hand over of PHCN to new investors SAM IKEOTUONYE

M

onday, September 30, 2013. It was the last day of the month and a day before the 53rd anniversary of Nigeria's independence from Britain in 1960.

The Nigerian government had chosen that day to hand over its assets in the power sector to new investors. President Goodluck Jonathan handed over licences and certificates of the Power Holding Company of Nigeria, PHCN, to the buyers of successor companies of the national power monopoly.

Expectedly, workers of the Power Holding Company of Nigeria turned out across the nation to protest the hand over. Chairman, Lagos State Chapter, National Union of

Electricity Employees, NUEE, Mr Adeleke Ibrahim explained that the workers were against the handing over of the company to new investors before full payment of their terminal benefits.

In Abuja, they barricaded the entrance to the PHCN headquarters at Maitama District as President Jonathan was presenting the certificate and licences to the new owners at the Banquet Hall of the State House.

The workers, who carried various placards, one of which read, “Jonathan, please pay PHCN staff severance packages,” were peaceful in their protest.

NUEE chairman, Comrade James Ademola Ayeni, said the workers were protesting the handover of PHCN facilities to investors who claimed to have bought them over.

“We do it peacefully and the way we do it is to ensure that all PHCN installations are shut down all over

Nigeria; then we carry out a protest peacefully for the government to come and ask us what is happening and we will be able to tell them so that you will know who is lying,” Ayeni said.

According to him, the government had in July raeched an agreement with the union that it (government) should privatise PHCN and ensure that all the labour issues were sorted out before handover to the buyers.

2013 October, SweetcrudeReports

Labour

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Govt to complete payment of electricity workers before Jan. 1

C

hairman of the Presidential Task Force on Power, Mr Beks DagogoJack, says the Federal Government would not allow the payment of all outstanding entitlements of Power Holding of Nigeria, PHCN, workers to extend into the New Year.

Dagogo-Jack dropped the hints at a Power Investors’ Summit in Lagos, saying that outstanding entitlements of the workers would be settled by December and that all other labour issues would be addressed.

“We have an agreement with the PHCN workers unions and we have almost completed the payment, but they will all be settled before January 1, 2014 deadline,” he said.

The task force chairman, who stated that the

Federal Government had only presented certificates to the investors in the PHCN successor companies, said the physical and structural aspect would be handed over before the end of 2013.

Dagogo-Jack said the desire of the stakeholders was that between now and December there should be a transition period in the management of the power industry.

The transition period, according to him, would enable investors to make necessary adjustments besides providing avenue for them to test run the market so that they would know where they were heading to.

“In the transition setting, it gives you an opportunity to test where you are heading to so that when you get there you cannot go wrong,” he said.

Rural electrification

T

he Petroleum and Natural Gas Senior S t a f f Association of Nigeria, PENGASSAN, claims that corruption is at the root of government’s inability to generate enough electricity for the nation as in many other areas of failure in government.

The association made the assertion as it urged the government to allow the road map for power generation and distribution to fully come on stream before considering any increase in electricity tariffs.

Chairman of the Nigerian Electricity Regulatory Commission, NERC, Dr. Sam Amadi, had argued that a recent increase in tariffs, in spite of shortfall in service delivery, was in the best interest of Nigerians as it would encourage more investors to come into the sector and provide more abundant power.

The oil workers' union, in a statement, however, faulted the NERC chairman, saying that additional tariff charges

Corruption at the root of inability to generate adequate power, says PENGASSAN …Faults NERC on tariff increase will not be in the long term interest of the consumers.

PENGASSAN's Public Relations Officer, Seyi Gambo, in the statement, cited the case of the telecoms sector where private investors came in and forced Nigerians to pay outrageous fees for SIMs that were supposed to be free.

According to him, the investors taking over the Power Holding Company of Nigeria, PHCN, generation and distribution companies had paid so dearly for them that the overnment would find it difficult preventing the exploitation they would bring upon consumers.

The statement read: “PENGASSAN watches in dismay and unbelief as the NERC braces up to implement

At first glance, new observers and watchers of policy somersault and abuse in the country may be tempted to fall in line with the reasoning advanced by Dr. Sam Amadi its decision on pricing regime of electricity even as Nigerians groan under an irregular supply of the commodity, nationwide.

“At first glance, new observers and watchers of policy somersault and abuse in the country may be tempted to fall in line with the reasoning advanced by

Dr. Sam Amadi. His argument, however, flies when considered with the objective realities on ground. In a recent meeting with the media, the Minister of Power, Mr. Chinedu Nebo, informed that the federal government has expended about $3.5billion yearly in the last

10 years for the provision of electricity to Nigerians.

“It is also noteworthy that the same federal government, while issuing license to Independent Power Producers (IPP) two years ago charged them to generate enough electricity and supply to the national grid, while also revealing that consumers could pay higher tariffs on two fronts via the fixed cost and energy cost, that is cost per kilowatt hour, private or corporate.

“We are equally of the opinion that corruption has been at the root of government’s inability to generate enough electricity for its people, likewise many other areas of failure in government.

2013 October, SweetcrudeReports

Labour TOJU VINCENT

T

he Nigeria U n i o n o f Petroleum and Natural Gas W o r k e r s , NUPENG, has lamented what it called haphazard implementation of the Collective Bargaining Agreement, CBA, it signed in the past with the Petroleum Dealers Association of Nigeria, PEDAN. The union also warned PEDAN and the oil marketing companies in the c o u n t r y o n t h e implementation of of the provisions of the CBA and labour legislations to avert possible industrial action.

In a statement after the signing of a new CBA for the Petrol Station Workers, PSW, branch of NUPENG with PEDAN, the unions general secretary, Isaac Aberare, said while the previous agreement was implemented haphazardly by some PEDAN members, others chose to outrightly ignore its provisions.

Aberare said in the statement: “NUPENG has signed a Collective Bargaining Agreement (CBA) for the Petrol Station Workers branch (PSW), with the Petroleum Dealers Association of Nigeria (PEDAN) in the downstream sector of the oil and gas industry. The PSW branch of NUPENG comprises pump operators, drivers, mechanics, watchmen, driveway supervisors, supervisors, book-keepers and station managers of petrol stations.

“The union re-iterates that the former agreement was haphazardly implemented by some of the members of Petroleum Dealers Association of Nigeria, (PEDAN), while many totally refused to implement provisions of the Collective Bargaining Agreement (CBA) in defiance to extant labour legislations.

"The Union calls on Petroleum Dealers Association of Nigeria (PEDAN) and the oil marketers to use its best endeavour to ensure that the agreement is fully complied with to avoid any industrial dispute that can result to crisis in the downstream sector of the oil and gas industry. NUPENG states that there is tension and

30

NUPENG laments poor implementation of agreement by fuel dealers

NUPENG leaders

restiveness among its members, as they are tired of being denied benefits provided in the Collective Bargaining Agreement.”

He also said in the statement that the union expected “prompt positive action in the matter to avoid any

confrontation with NUPENG as this will not augur well for their relationship," adding that the agreement which will remain in force for a period of two years was signed on behalf of NUPENG by Comrade Igwe Achese,

President; Comrade Isaac O. Aberare, General Secretary; Comrade Roland Abu, PSW branch chairman and Comrade Abass Adegoke, Branch Secretary.

The Petroleum Dealers Association of Nigeria

officials that signed on behalf of the association are Alhaji Kabir Umar, National President; Comrade I. A. Eze, National SecretarySecretary and Mazi Sweet Asouzu, for the Zonal Vice Presidents.

SURE-P, Valdivia Services train 287 on skills development OLUONYE KONYEGWAEHI

T

he Federal Government through the Subsidy Reinvestment and Empowerment Programme, SURE-P, and the Federal Ministry of Youths and Sports Development in collaboration with Valdivia Services Ltd have organised a twoweek skills acquisition training programme for 287 youths in the SouthWest region of the country.

The youths, drawn from the Community Services, W o m e n , Y o u t h

The youths, drawn from the Community Services, Women, Youth Employment project of the SURE-P programme and from among the public, were trained at the National Youths Development Training Centre Employment project of the SURE-P programme and from among the public, were trained at the National Youths Development Training Centre in the Owode-Egba area of Abeokuta, Ogun State.

46 participants from Lagos State took part in the

training programme, out of which 24 were selected from the Community Services, W o m e n , Y o u t h s Employment project.

The Vice chairman, SUREP, Lagos State, Mr. Joseph Modey, accompanied by some officials in the committee, visited the

National Youths Development Training Centre, venue of the programme.

Addressing participants, Mr Modey, stressed the value of skills acquisition towards self empowerment and gainful employment to break away from the vicious circle of poverty.

During the visit, SURE-P participants from Lagos state, on behalf of other participants, expressed their gratitude to the National Youths Development training centre for providing them the opportunity to acquire skills that would benefit them.

2013 October, SweetcrudeReports

Labour

31

Oil theft

NLC lament government's inability to check crude oil theft Eluonye KOYEGWUAEHI

N

IGERIA L a b o u r Congress, NLC, has expressed shock over government's failure to check high level of crude oil theft because of the involvement of the high and the mighty, saying the unacceptable levels of crude oil theft have virtually left the economy prostrate.

NLC lamented that 53 years after independence, the vision of Nigeria’s founding of a productive economy, socio-economic justice, peaceful co-existence which every Nigerian should be proud of, has almost disappeared into thin air.

In a statement to mark the country’s independence anniversary, NLC President and Acting General Secretary, Comrade Abdulwaheed Omar and Chris Uyot, however congratulated Nigerian workers for their patience and patriotism in the face of gross deprivation and

poverty in the midst of so much wealth.

“Fifty three years after, Congress notes with concern that while little has changed, some of the changes have been traumatic indeed. Sectariancum communal crises across the country have led to unacceptable blood-letting as

well as caused massive displacements with potential for food shortages and disunity. Congress appreciates the challenges our security agencies are facing in the course of maintaining the peace during these moments, but condemns in strong terms

the incessant and protracted senseless killings of helpless and innocent Nigerians.”

“Congress observes with shock that government's promises of checking this ugly trend has not yielded the desired result because of the involvement of the high a n d t h e m i g h t y

Unacceptable levels of crude oil theft have virtually left the economy prostrate. The turbulence in the education sector is worrisome as it has literally ground to a halt all activities. Our students have been at home for three months.

PENGASSAN faults NERC on increases in electricity tariff Eluonye KOYEGWUAEHI

P

ETROLEUM and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has described as unbelievable and unacceptable the increase and planned increase in electricity tariff by Nigerian Electricity Regulatory Commission, NERC, even under erratic and very poor power supply condition.

PENGASSAN called on the Federal Government to allow the Road map for power generation and distribution to fully come on stream before contemplating additional charge to consumers of the

product.

The association in a statement by Comrade Mohammed Gambo, its Public Relations Officer, PRO, said “PENGASSAN watches in dismay and disbelief as the Nigerian Electricity Regulatory Commission, NERC, braces up to implement its decision on pricing regime of electricity even as Nigerians groan under an irregular supply of the commodity, nationwide. Having listened carefully to the rationale adduced for these increases in tariff by Dr. Sam Amadi, the distinguished Chairman of Nigeria’s Electricity

Regulatory body that tariff must increase since the Multi Year Tariff Order, MYTO, took effect from June 2012, and it provides for periodic increment in electricity tariff per kilowatt in Section 76 of the Electricity Power Reform Act, 2005.

Though the last regulation and review of electricity pricing took place in 2012 and it is expected that this regime will remain constant till 2017, when another round of regulation is expected to take place, inflationary rate in the country has made it expedient that there should

be increase in tariff.”

"The increase in tariff, in spite of shortfall in service delivery is in the best interest of Nigerians on the long run as this would encourage more investors to come into the sector and provide life more abundant as being witnessed in the Telecommunication industry. At first glance, new observers and watchers of policy somersault and abuse in the country may be tempted to fall in line with the reasoning advanced by Dr. Sam Amadi. His argument however flies when considered with the objective realities on ground.

Solid Mineral

2013 October, SweetcrudeReports

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Accommodation problem threatens Ajaokuta’s new take-off plan

I

f all goes according to plan, products would be rolling out from the rolling mill of the Ajaokuta Steel company soon.

The management of the company said it had concluded arrangement to put the rolling mill, a critical

aspect of the steel factory, on stream.

But, shortage of accommodation for foreign workers expected at the plant may yet derail this plan.

Plans have been in top geared by the management of the company and REPROM

Nigeria Limited for the plant to take off after several delays by successive government in the country.

Managing Director of REPROM Nigeria Limited, Mr Attah Achimugu, c o n f i r m e d t h a t accommodation which is key

to the success of the steel company has become the major problem as he disclosed that contract for the necessary Low Pour Fuel Oil, LPFO, to lubricate the rolling mill had been issued to a successful company, and that the product had since been delivered.

Both the interim management of the steel plant and REPROM Nigeria Limited are already making efforts to renovate hundreds of abandoned houses to

p r o v i d e e n o u g h accommodation to the expatriates.

Achimugu said the rolling mill has been lubricated and undergoing test runs, adding that full operation of the section would commence this month.

REPROM Nigeria Limited had last year entered into a M e m o r a n d u m o f Understanding, MoU, with the interim management of Ajaokuta Steel Company.

Gov. pleads with FG to resuscitate Ajaokuta Steel, NIOMCO

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overnor Idris Wada of Kogi State has appealed to the Federal Government to resuscitate the moribund Ajaokuta Steel Company in the state.

Wada made the appeal in Geregu at the inauguration of the Geregu 11,434megawatts power plant, saying the measure was necessary to enable the state to reap maximally from the new power plant.

He also appealed that the National Iron Ore Mining Company, NIOMCO, at Itakpe should also be resuscitated to revitalise economic growth and development in the country.

The governor, who described the completion of the project as a way forward in the nation's quest for stable power supply, said that it was an excellent investment.

Wada lauded President Goodluck Jonathan for

Ajaeokuta Steel production line

putting the issue of power generation, transmission and distribution in the front burner and thanked him for his support and concern during the 2012 flood disaster that ravaged parts of the state.

The governor appealed that the request by the s t a t e f o r t h e establishment of a free enterprise zone in Ajaokuta be given speedy consideration.

Mr Michael Lakota, the Managing Director of Siemens Ltd., the contractor that handled the project, said that the plant would play a critical role in the efforts to ensure stable power in the country.

He commended the Niger Delta Power Holding Company, the owner of the project, for the confidence reposed in Siemens throughout the entire project.

Lakota said that the project was completed on schedule.

2013 October, SweetcrudeReports

Solid Mineral

33

Mining site

Govt plans Mining Industry Tax Act to improve revenue

T

he Federal Government is planning a Mining Industry Tax Act to address the revenue challenges in the solid minerals sector, Minister of Mines and Steel Development, Mr. Musa Sada, has said.

Sada said the government would, as part of efforts towards achieving this, be developing a sector-specific fiscal regime that would put the Tax Act in place.

The minister spoke as he urged operators in the mining sector to cooperate with the Nigerian Extractive Industries Transparency Initiative, NEITI, in the generation of relevant data for the 2011 solid minerals sector audit or risk a revocation of their licence.

He explained that the 2007-2010 NEITI audit report helped expose numerous lapses in the sector, adding that this enabled the ministry to strengthen its system by closing up the gaps and improving on revenue collection as well as accountability in tax and royalty regimes.

Warning operators to shun acts that could work against the goals of the planned audit, he revealed that the ministry has commenced collaboration with infrastructure ministries to facilitate proper assessment of revenues.

"It is important that I state here that cooperating with NEITI during this audit period is mandatory otherwise, you will be in default of the Nigerian Minerals and Mining Act, 2007, which is very clear on the declaration of all results of your mining operations.

“The penalty for non-disclosure of required information may include revocation of mining licences, among others,” Sada said at a NEITI workshop for the 2011 solid minerals

sector audit in Abuja.

The 2007-2010 NEITI audit revealed an unreconciled N687 million

as total aggregate discrepancy in government revenue, which is about 12.5 per cent of the total government receipts over companies’ payments.

ALSCON's missing oil tank found at Ibom Power Plant

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he missing 50,000-litre oil tank belonging to the Aluminium Smelter Company of Nigeria, ALSCON, in Ikot Abasi, Akwa Ibom State, has been found at the Akwa Ibom State government-owned Ibom Power plant.

The missing tank is one of the facilities for which the Russian firm Rusal has been accused of asset stripping.

Rusal, which has been sacked by the Supreme Court as managers of the plant, had earlier in the year sent away workers at the plant and shut it. But, it is being accused by America's BFIG Group, the the new managers, according to the Supreme Court ruling, of stripping the plant of its asset to make it difficult for it (BFIG) to operate the plant.

SweetcrudeReports gathered that vigilant community leaders and ALSCON workers, who have equally

been raising the alarm over Rusal's sale of the plant's facilities, aided the discovery of the missing tank at the Ibom Power Plant.

BFIG's Executive Vice President (Media Relations), Frank Scherer, confirmed the development, saying investigations were on to establish how the tank got to Ibom Power Plant.

Scherer, who maintained that a highly placed official at Ibom Power had admitted that the tank was transferred to them by Rusal, lamented: “Even after the Supreme Court, the highest court in Nigeria, in its ruling of July 6, 2012 ordered the BPE to take over

the plant and prepare to hand over to the preferred bidder that emerged at the end of the bid exercise in 2004, the privatisation agency has always neglected to do its job.

“Reports of massive asset striping and illegal removal of critical assets of ALSCON have always been reported to BPE against UC RUSAL. But, it is a shame that BPE has always shown that it has other selfish interests to protect over this national asset.

“This is a disturbing development when BPE keeps denying and deceiving Nigerians and the Presidency about the serial pillage at the company.”

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T

here is anxiety at the Lagos ports over C u s t o m s irregular tariff r e g i m e , w h i c h SweetcrudeReports gathered, may force Customs agents at the ports to embark on strike.

At the heart of the problem is the irregular Customs tariffs classification on cargoes which, according to the agents, came recently from the Nigeria Customs Service, NCS, Abuja headquarters.

According to freight forwarders at the PTML Customs command, valuation officer issues value to be paid on a cargo and after the money has been paid, the Customs would still go ahead to issue alerts on the same cargo, thereby subjecting the importer to another round of payments.

It was learnt that freight forwarders may have resigned themselves to fate over the matter, Customs agents might be embarking on strike to protest the development.

"We should not be held responsible for anything that happens because right now it is getting out of hand.

Valuation is the area we are having problems, whatever you do here, you will get headquarters alert, valuation alert, CPC alert and jack alert and you will

Nigerian Customs officers at work

Customs agents may down tools over irregular tariff regime not know which one you are facing,” an aggrieved agent said.

National Treasurer of the National Association of Government Approved

Freight Forwarders, NAGAFF, Mr. Simeon Olua, confirmed that the irregular tariff regime also obtains at the Tin Can Island Container Terminal, TICT.

According to him, besides the alerts, the assessment that should be issued to correct the valuation problem was not being issued on time.

He asserted: "How can it be

Single Window for Nigerian shippers ready in 2014 —Official TOJU VINCENT

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senior official of the Nigerian Shippers Council, Mr Robert Bulama, has said that the single-window environment for Nigerian shippers would be operational in early 2014.

Bulama, who is the head of the commercial shipping services department in the c o u n c i l , t o l d Sweetcrudereports in Aba, Abia State that the system would assist shippers to clear cargoes in good time.

He said the system would allow shippers to plan for their warehousing and other related businesses, urging shippers to support the process because it would bring a lot of benefits to them.

"Concerning the completion of the process, I can say categorically that Nigeria has gone above 50 per cent in the implementation process,’’ he said.

The operating officer also said that "a lot of agencies are hooked up to the Nigerian Integrated Customs Service",

which is a portal that connects most of the regulatory agencies and the shippers to the single window.

Bulama said that the system, which began in 2010, was halted due to administrative bottleneck, but had been restarted and had gained 50 per cent implementation stage.

He said the completion of the remaining 50 per cent would unfailingly happen by 2014.

that in a system you will have ‘headquarters alert’, ‘CPC alert’, ‘Committee alert’ on almost every job there is an alert, and the greatest problem is that they don’t even have sufficient officers to manage the printing of assessment for the payment.

"At TICT , only one person is handling the issue of alert and printing the assessment which is not acceptable, some of us stay five to six days in the process of printing assessment for the alert. This means you are begging government to give you assessment for you to pay duty.”

Spokesman of the PTML Custom Command, Mr. Steve Okonmah, affirmed that the Customs has introduced a new valuation system, explaining that an audit system alerts is issued on a cargo from Customs headquarters if the value paid on the cargo was below what the importer ought to pay. He added: “By the time you go to release your job and it is lower than the new tariff regime, no matter how you punch it, it must show. When this is detected they send you back to the valuation”.

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'New $17.5m equipment to bring efficiency to Apapa Port’

Apapa Port

N

igeria’s Apapa Port is expected to see increased efficiency following the procurement by APM Terminal Apapa Limited, APMT - the managers of the port - of five new Rubber Tyre Gantry Cranes, RTGs, valued at $17.5million.

With the new equipment, which is expected to facilitate trade in line with global trend, APMT becomes the

With the new equipment, which is expected to facilitate trade in line with global trend, APMT becomes the first terminal in Africa to have RTGs as obtained in United States of America

first terminal in Africa to have RTGs as obtained in United States of America.

The Port Manager, Mr. Mohammed Nasir, who spoke at the commissioning ceremony for the equipment, expressed satisfaction on the quality of the cranes as he noted that APMT had in the last seven years repackaged the facility with new assets to turn the port into a world class facility.

“We believe in what APMT is doing to enhance service

Fraudsters invade PTML TOJU VINCENT

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fforts by Port and Terminal MultiServices Limited, PTML, operators of the PTML Terminal, Apapa, Lagos, to operate a security access card system may have suffered a setback as saboteurs are working to beat the system.

The system, which kicked

off March 4, this year, it was learnt, is part of PTMLS' efforts at boosting the integrity of the facility, in keeping with the International Ship and Port Facility Security, ISPS, code.

C o n f i r m i n g t h e development, PTML’s General Manager, Mr. Tunde Keshiro, said the company has commenced a security access card system for Customs

agents and others entering its terminal, but was silent on the cost of the project.

"It is part of the ongoing infrastructural investment in the terminal and this will be disclosed at the appropriate time," Keshiro said.

PTML, according to him, is billing N1,250 per card holder for the issuance of the document.

Although he was unable to disclose the number of these cards issued so far, he noted that the port access control project will keep unwanted visitors away from the terminal.

He also disclosed that the project has attracted v e r y p o s i t i v e commendation from stakeholders within and around the port.

delivery for customers, as the company has been in the forefront of deploying modern equipment and constant capacity building give Apapa Port global competitive edge.

“The port is synonymous with APMT because its success translates to the success of Nigeria’s economy. The company has a unique development plan to transform and make Nigeria a leading port in Africa. We believe by the second quarter of 2014, every issue associated with service delivery would be fully addressed,” Nasir said.

Mr. Andrew Dawes, Managing Director of the company, who also spoke at the event, disclosed that “APMT Apapa is part of the APM terminals network of 63 terminals and ports around the world," adding that it is the largest container terminal in Nigeria and in West Africa.

"APM Terminals is committed to developing the Apapa container terminal into a world class facility,” he also said.

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Lagos Port

Govt deploys measures to check congestion at Lagos ports TOJU VINCENT

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s part of measures to a r r e s t congestion at the Lagos sea ports, the Federal Government has banned the stemming of vessels to terminals until the backlog of vessels is cleared.

The move is part of the decision of the committee set up by the Minister of Transport, Senator Idris Umar to resolve congestion at the ports, which has been attracting widespread condemnation.

The development has nearly grounded operations at the ports before the intervention by the minister.

Headed by the Executive Director, Marine Operations, Nigerian Ports Authority,

NPA, the Committee, which was given three days to submit its report, resolved that containers positioned for examination should be inspected within 36 hours.

The committee ruled that any stakeholder that causes any form of delay in the course of examination would bear the cost of such delays, adding that terminal operators should ensure that cargo handling equipment is made available for multiple examination.

The resolution read in parts: “It is agreed that the Minister of Transport would request the Coordinating Minister for the Economy and Minister of Finance to direct the Comptroller General of Customs to consider allowing for re-routing of containers (from scanning to physical

examination) to ease congestion”.

The resolution was also that freight forwarding groups should stop the collection of members’ fees inside the port premises to avoid delay in the exit of cargoes out of the ports.

There was also a resolution to the effect that the managements of the NPA and the Nigerian Shippers’ Council, NSC, should collaborate to streamline and harmonize charges for the use of off-dock terminals just as terminal operators are encouraged to adopt the use of barges where applicable for the transfer of containers to such facilities.

Any container examined, but declared for detention by any security agency shall be formally reported to the

INVESTMENTS BY TERMINAL OPERATORS The Port and Terminal Multiservice Limited has invested over 100million USD in infrastructural development.

Port and Terminal Operation invested over 3.2 billion Naira.

ENL Consortium has invested over 7 million Euros and 1 billion Naira on equipments.

INTELS has invested over 4 billon USD. Apapa Bulk terminal procured a single new cement loader worth 5 million USD. The APM Terminals disclosed that it has invested about N31 billion ($200 million) in upgrading and modernizing the Apapa Container Terminal in the last six years, with an additional N20 billion ($130 million) investment planned over the next three years.

Nigeria Customs Service by the Security agency issuing the detention order, the committee also resolved.

In the process of carrying out investigations, the committee discovered that large portions of some of the affected terminals have been taken over by empty containers and therefore, resolved that if a terminal

has more containers than it can handle, the next vessel should be stemmed to the next terminal.

The port managers of the affected terminals were mandated to ensure compliance by monitoring and enforcement of the resolutions through their traffic departments on a daily basis.

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Admissions into NMA against global best practice —Master mariners

Nigerian Cadets

TOJU VINCENT

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he Nigerian Association of M a s t e r Mariners, NAMM, has expressed misgivings with the high number of intakes of cadets at the Maritime Academy of Nigeria, MNA,

Oron in Akwa Ibom state, describing the development as contrary to international best practice.

Warning the academy to beware of the manner people were being trained, the master mariners said with the way t he t r a i ni n g w a s b e i ng conducted, it would soon be discovered that the nation had

not trained anybody.

They alleged that the institution was currently churning out shipping administrators and not core mariners as they urged a reworking of the school’s curriculum so as to give the training of mariners due priority.

The National Board for

Technical Education, NBTE, has reportedly also frowned at the fact that the academy has not been able to get approval for its electrical department.

At the Annual General Meeting of the association, the newly elected president of the NAMM Captain Adegboya Olopaenia

NIMASA pledges efficient implementation of Cabotage Law

M

r Patrick Akpoboloke mi, director general of the Nigerian M a r i t i m e Administration and Safety Agency, NIMASA, has pledged efficient implementation of the Cabotage Law to the satisfaction of all indigenous operators in the Nigerian maritime

sector.

According to him, NIMASA would be working to protect their rights under the Cabotage regime.

Akobolokemi said in a goodwill message at the launching of two 45,000 metric tonnes sea-going vessels, MT Abiola and MT Igbinosa, owned by Ocean Marine Tankers Limited in Warri, Delta State, that Nigeria

should increasingly get involved in the ownership of ocean going vessels.

Commending the management of Ocean Marine Tankers Limited for investing in the new vessels, he called on more Nigerians to invest in the ownership of ocean going vessels.

Executive Secretary, Nigerian Local Content Developing Monitoring

Board, Mr. Ernest Nwakpa, who was the event, lauded the Goodluck J o n a t h a n government for providing the right atmosphere for Nigerians to aspire to take control of the lifting of nation's crude oil.

pledged to partner with the institution to find a lasting solution to the problem.

He said: “We will engage the management of the institution and make them see the need to reduce the number of their intakes. We must reduce the number of cadets admitted to the academy, how many of these cadets are on board vessels?

How many of these cadets are gainfully employed?"

According to Captain Olopoenia, the newly elected leaders of the association will consolidate on the achievement of his predecessor.

Media consultant to the academy, Mr. Ovie Edomi, has, however, explained that the number of cadets admitted is because the academy is currently the only maritime institution set up to train mariners. He stated that all the courses at the academy have been accredited by the NBTE except for the electrical department and that efforts are ongoing to get it accredited.

Motoring

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The Automotive Industry in Nigeria

T

he history of Automotive Industry in Nigeria dates back to the early 1960s when private companies like UAC, Leventis, SCOA, BEWAC and R.T. Briscoe pioneered the establishment of Auto Assembly Plants using Completely Knocked Down (CKD) or Semi-Knocked Down (SKD) parts.

Government however, became involved in the industry between 1970-1980 when it concluded agreements with a number of Automobile Plants in Europe to set up 2 cars and 4 truck/light commercial vehicles assembly plants using Completely Knocked Down (CKD) Parts.

The 2 car plants are Peugeot Nigeria Ltd. (PAN), Kaduna, and Volkswagen of Nigeria Ltd. (VWON) Lagos.

The 4 truck plants are A n a m b r a M o t o r Manufacturing Company (ANAMMCO), Enugu, Styer Nigeria Ltd., Bauchi, N a t i o n a l T r u c k Manufacturers (NTM), Kano, and Leyland Nigeria Ltd., Ibadan. These car and truck/light commercial vehicle plants were all privatised by the end of 2007.

In 1982, the Federal Government completed agreements with five manufacturers for the establishment of the following five light commercial vehicle assembly plants: Mitsubishi in Ilorin, Nissan in Minna, Peugeot in

IVM 5000

IVM 6900

Gusau, Isuzu in Maiduguri and Mazda in Umuahia.

However, they were not established, though GM subsequently entered into partnership with UAC to produce Isuzu by FMI of CONTINUES ON PAGE 40

IVM 6867H

2013 October, SweetcrudeReports

Motoring

The Automotive Industry in Nigeria CONTINUED FROM PAGE 39 UAC, which later became GM Nigeria Ltd. The Nigerian automotive Industry has installed capacity to produce 108,000 cars, 56,000 commercial vehicles, 10,000 tractors, 1,000,000 motor cycles and 1,000,000 bicycles annually. Capacity ut ilisa t ion in v ehicle manufacture is below 10% and about 40% in motorcycle, bicycle and components parts manufacturing.

The current vehicle inflow into the economy is about 50,000 new and 150,000 used ones. This translates into about 100,000 units of new vehicles annually and is set to rise as the economy improves. The ECOWAS countries are current and potential customers for auto products from Nigeria.

INNOSON MOTOR MANUFACTURING PLANT IN NNEWI IVM is part of the Innoson Group of Companies founded by Mr. Innocent Chukwuma, Officer of the Order of the Niger, OON. IVM introduces automotive products from China, Japan and Germany. It's product line includes heavy duty vehicles, middle and high level buses, special enviroment friendly vehicles. The company carries out optimization design and assembly according to west African road condition so as produce suitable products at affordable prices.

The company also provides good services for repairs and parts supply.

All these actions are engineered to meet the customers' special requests, attain the highest possible performance and safety standards and also make the vehicles suitable for the West African market.

IVM products include vans, car pick-ups, city buses, SUVs and special vehicles designed to service the local and export markets.

IVM 6800

IVM 6121

IVM Assembly plant

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Technology

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Floating Liquefied Natural Gas

F

l o a t i n g liquefied natural gas (FLNG) refers to water-based liquefied natural gas (LNG) operations employing technologies designed to enable the development of offshore natural gas resources. While no FLNG facilities currently exist, a facility is in development by Royal Dutch Shell, and is due to be completed by around 2017. Floating above an offshore natural gas field, the FLNG facility will theoretically produce, liquefy, store and transfer LNG (and potentially LPG and condensate) at sea before carriers ship it directly to markets.

Background Studies into offshore LNG production have been conducted since the early 1970s, but it was only in the mid-1990s that significant research backed by experimental development began.[3] In 1997, Mobil developed a FLNG production concept based on a large, square structure with a moon-pool, commonly known as "The Doughnut". In 1999, a major study was commissioned as a joint project by Chevron Corporation and several other oil and gas companies.

This was closely followed by the so-called 'Azure' research project, conducted by the EU and several oil and gas companies. Both projects made great progress in steel concrete hull design, topside d e v e l o p m e nt a nd L N G transfer systems.

Since the mid-1990s Royal Dutch Shell has been working on its own FLNG technology. This includes engineering and the optimization of its concept related to specific potential project developments in N a m i b i a , T i m o r Leste/Australia, and Nigeria.

In July 2009, Royal Dutch Shell signed an agreement with Technip and Samsung allowing for the design, construction and installation of multiple Shell FLNG

A LNG terminal

facilities.

Current projects A number of major gas and oil companies are still researching and considering FLNG developments, with several initiatives planned for the future. However, the world's first development of FLNG is Shell's Au$12bn Prelude FLNG project, 200 kilometres (120 mi) offshore Western Australia. Royal Dutch Shell announced their investment in FLNG on 20 May 2011 and construction began in October 2012.

In April 2010 Shell's FLNG technology was selected as the Sunrise Joint Venture’s preferred option for developing the Greater Sunrise gas fields in the Timor Sea. This followed an extensive and rigorous concept-evaluation process during which the merits of the project were weighed up against alternative onshore solutions. The Woodside-

operated JV is now seeking to engage regulators on the concept selection process.

Following the decision by Shell to go ahead with its Prelude FLNG development, the Sunrise project would be the second deployment of Shell’s proprietary FLNG design.

In February 2011, Petronas awarded a FEED contract for an FLNG unit to a consortium of Technip and Daewoo Shipbuilding & Marine Engineering. The facility will be located in Malaysia, although the specific gas field is unknown.

Petrobras has invited three consortiums to submit proposals for engineering, procurement and construction contracts for FLNG plants in ultra-deep Santos Basin waters. A final investment decision is expected in 2011.

Meanwhile, Japan's Inpex plans to leverage FLNG to develop the Abadi gas field in

the Masela block of the Timor Sea, with a final investment decision expected by the end of 2013.

Late in 2010, Inpex deferred start-up by two years to 2018 and cut its 'first phase' capacity to 2.5 million tons per year (from a previously proposed capacity of 4.5 million tonnes).

A c c o r d i n g t o a presentation given by their engineers at GASTECH 2011, ConocoPhillips aims

to implement a facility by 2016-19, and has completed the quantitative risk analysis of a design that will undergo pre-FEED study during 2011.

GDF Suez Bonaparte – a joint venture undertaken by the Australian oil and gas exploration company Santos (40%) and the French multiinternational energy company GDF Suez (60%) – CONTINUES ON PAGE 42

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LNG receiving terminal

Floating Liquefied Natural Gas CONTINUED FROM PAGE 41

has awarded a pre-FEED contract for the Bonaparte FLNG project offshore Northern Australia. The final investment decision is expected in 2014, with startup planned for 2018.

The first phase of the project calls for a floating LNG production facility with a capacity of 2 million mt/year.

Chevron Corporation is currently considering an FLNG facility to develop offshore discoveries in the Exmouth Plateau of Western Australia, while ExxonMobil is waiting for an appropriate project to launch its FLNG development.

Challenges Moving LNG production to an offshore setting presents a demanding set of challenges.

In terms of the design and construction of the FLNG facility, every element of a conventional LNG facility needs to fit into an area roughly one quarter the size, whilst maintaining the utmost levels of safety and giving increased flexibility to LNG production.

Once a facility is in operation, wave motion will present another major challenge. LNG containment systems need to be capable of withstanding the damage that can occur when the sea’s wave and current motions cause sloshing in the partly

filled tanks. Product transfers also need to deal with the effects of winds, waves and currents in the open seas.

Many solutions to reduce the effect of motion and weather are again to be found in the design, which must be capable of withstanding – and even reducing – the impact of waves. In this area, technological development has been mainly evolutionary rather than revolutionary, leveraging and adapting technologies that are currently applied to offshore oil production or onshore liquefaction. For example, traditional LNG loading arms have been adapted to enable LNG transfers in open water, and hose-based solutions for both side-by-side transfers in calmer seas and tandem transfers in rougher conditions are nearing fruition.

Advantages Natural gas is the cleanestburning fossil fuel. It is also abundant and affordable and may be able to meet world energy needs by realising the potential of otherwise unviable gas reserves (several of which can be found offshore North West Australia). FLNG technology also provides a number of environmental and economic advantages: Environmental - Because all processing is done at the gas field, there is no need to lay long pipelines all the way to

In this area, technological development has been mainly evolutionary rather than revolutionary, leveraging and adapting technologies that are currently applied to offshore oil production or onshore liquefaction the shore. There is also no requirement for compression units to pump the gas to shore, dredging and jetty construction or the onshore construction of an LNG processing plant, all of which significantly reduce the project's environmental footprint. Avoiding construction also helps preserve marine and coastal

environments. Additionally, environmental disturbance would be minimised during the later decommissioning of the facility, because it could be disconnected easily and removed before being refurbished and re-deployed elsewhere.

Economic – Where pumping gas to shore can be prohibitively expensive,

FLNG makes development economically viable. As a result, it will open up new business opportunities for countries to develop offshore gas fields that would otherwise remain stranded, such as those off the coast of East Africa.

Operation The FLNG facility will be moored directly above the natural gas field. It will route gas from the field to the facility via risers. When the gas reaches the facility, it will be processed to produce natural gas, LPG, and natural gas condensate.

The processed feed gas will be treated to remove CONTINUES ON PAGE 43

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Floating Liquefied Natural Gas CONTINUED FROM PAGE 42 impurities, and liquefied through freezing, before being stored in the hull.

Ocean-going carriers will offload the LNG, as well as the other liquid by-products, for delivery to markets worldwide. The conventional alternative to this would be to pump gas through pipelines to a shore-based facility for liquefaction, before transferring the gas for delivery.

Specifications In the case of Shell’s Prelude FLNG, engineers have managed to fit every component of an LNG plant into an area roughly one quarter the size of a conventional onshore plant.

Even so, Shell's facility will be the largest floating offshore facility ever built: It will measure around 488m long and 74m wide, and when fully ballasted will weigh 600,000 tonnes (roughly six times as much as the USS Nimitz aircraft carrier).

The specifications make Shell's FLNG facility particularly well-suited for fields with high production rates for reserves starting at 2 to 3 trillion cubic feet (57×109 to 85×109 m3) and beyond – less than a tenth the size of the Groningen gas field off the Netherlands.

Technology The floating facility will chill natural gas produced at the field to –162°C (-260°F), shrinking its volume by 600 times so it can be shipped to customers in other parts of the world.

Ocean-going carriers will load the LNG as well as other liquid by-products (condensate and LPG) for delivery to market.

The Prelude FLNG facility will be 488m (1,600-feet) long, 74m (240-feet) wide and will displace around 600,000 tonnes of water.

It will be the largest floating offshore facility in the world.

The Prelude FLNG facility is being built at Samsung Heavy Industries’ Geoje Island ship yards in South Korea.

The Samsung ship yard is one of the few yards in the world big enough to construct a facility of this size.

Floating LNG plant

Once constructed, the facility will be towed to its location, approximately 475 kilometres (around 300 miles) north-northeast of Broome, Western Australia.

The facility will be moored and hooked up to the undersea infrastructure and the whole production system commissioned.

The Prelude FLNG facility has been designed to withstand the most powerful tropical cyclones.

It will remain permanently moored at the location for around 20-25 years before needing to dock for inspection and overhaul.

The LNG, LPG and condensate produced will be stored in tanks in the hull of the facility.

LNG and LPG carriers will moor alongside to offload the products.

Markets The Prelude FLNG Project is well placed to help meet the growing natural gas demand of Asia.

Environment & society The project will create

Developing the gas at the location of the gas field will reduce impact on sensitive coastal habitats as FLNG avoids the need for shoreline pipe crossings, dredging and jetty works around 350 direct and 650 indirect jobs. Recruitment of staff to operate the facility will ramp up during 2013 and 2014. Prelude will also provide taxes and revenue to Australia, create opportunities for local businesses and result in Shell spending billions in capital and operating expenditure.

T h e A u s t r a l i a n Government gave the Prelude FLNG Project environmental approval on November 12, 2010.

The Prelude FLNG Project will use significantly less materials, land and seabed area than developing the

same gas via a similar onshore facility.

Developing the gas at the location of the gas field will reduce impact on sensitive coastal habitats as FLNG avoids the need for shoreline pipe crossings, dredging and jetty works. Product carriers will be far from coastal reefs or whale migration routes.

Construction The Shell FLNG facility will be constructed at Samsung's Geoje Island shipyard in Korea. Some modules may be constructed elsewhere and then transferred to the shipyard for assembly. The facility

can remain on station for more than 25 years, and its lifetime can be further extended through overhaul and refurbishment. The hull has a design life of 50 years.

Safety A unique feature of Shell’s FLNG design is its ability to stay safely moored in harsh weather conditions, including category five cyclones. Potentially, this could result in more uptime for the facility.

Additionally, Shell designers have optimised safety on the facility by locating storage facilities and process equipment as far from crew accommodation as possible. As a result of this, the accommodation areas of visiting LNG carriers are also at maximum distance from critical safety equipment. Safety gaps have been allowed between modules of process equipment so that gas can disperse quickly in the event of a gas leak.

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Community water project

Chevron commissions N140m community projects

C

h e v r o n N i g e r i a Limited, operator of the NNPC/Chevro n Joint Venture, has commissioned new projects in some communities constituting the EgbemaGbaramatu Community Development Foundation, EGCDF. The projects valued at N140 million were executed under the company’s Global M e m o r a n d u m o f Understanding, GMoU, in Nigeria's Western Niger Delta region. The new projects are besides over 40 infrastructural projects commissioned in the

Lamenting the alarming rate of illegal oil bunkering activities and pipeline vandalism in the Niger Delta region, he warned that the leadership of the RDC would not spare anyone found guilty of such offences communities late last year, which are worth over N1.3 billion.

Projects commissioned in Egbema-Gbaramatu Community Development Fund included three-bedroom bungalow at Benikrukru and a

town hall at Okoyitoru communities. Two other projects, a solar-powered water facility at Opuama, and Staff Quarters at Ogbinbiri, have been scheduled for commissioning on a later date.

Speaking at the commissioning ceremony and town hall meetings organised by EGCDF Chairman, the Foundation's chairman, Chief Michael Johnny, urged support from the people in terms of continuing to provide the right environment for Chevron to operate in the area.

Lamenting the alarming rate of illegal oil bunkering activities and pipeline vandalism in the Niger Delta region, he warned that the leadership of the RDC would not spare anyone found guilty of such offences.

Johnny also urged parents to counsel their children and relatives against such criminal acts and encouraged the people to always adhere to the rule of law and constructive dialogue in the resolution of all issues through the EGCDF, and to avoid unnecessary litigations.

THe Foundation chairman expressed appreciation for the NNPC/Chevron Joint venture for the commitment to the GMoU, and noted that the Foundation seeks to engage other donors and intervention agencies to assist in funding development projects in the communities.

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Gombe communities send SOS to NNPC over water pollution

Polluted water

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ollowing the b u r s t i n g recently of a Nigerian N a t i o n a l Petroleum Corporation, NNPC, petroleum products pipeline in Gombe State and t h e c o n s e q u e n t

contamination of drinking water, residents of communities hit by the development have appealed to the NNPC to provide them with alternative source of water.

An NNPC pipeline in Tudun Wada Malam Jamo burst last

month resulting in oil spill which led to the adulteration of the river and only water source in the area.

The development affected residents of Tudun Wada Malam Jamo, Konkeje and Jauro Baba communities.

Spokespersons of the

communities, Alhaji Yayari Jungudo and Umar Ajiya, said that following the spillage, the three communities had been without portable water as the only water available was contaminated.

“We woke up around 4.30

am on Saturday only to discover that the stream had been contaminated with petroleum due to the pipeline burst. Today, all the residents of these three villages went as far as Gamadaji village, about four kilometres away, to fetch water.

“We do not have wells or boreholes or any other source of water but the river and it has now been contaminated by petroleum. We appeal to the NNPC or the authorities concerned to provide us with alternative sources of water supply,’’ Jungudo said.

Also speaking, Ajiya, who is the youth leader in the area, said the people in the area were facing difficulty following the development.

He said that a similar incident occurred at the beginning of the raining season this year, when the pipeline burst, appealing to NNPC to address the problem to ease the difficulty being faced by people in the area.

All attempts to get comments from officials of the NNPC failed. A staff of the NNPC, who pleaded anonymity told the News Agency of Nigeria that “nobody will talk to you; even the Branch Manager will not talk to you.’’ But, he said NNPC engineers were working hard to repair the burst pipeline.

Uduaghan says oil theft, piracy, kidnapping down in Delta

T

he rates of crude oil theft, sea pricey and kidnapping has reduced in Delta State, according to Governor Emmanuel Uduaghan.

The governor disclosed this at a meeting with local government transition committee chairmen and traditional rulers in Asaba, the state capital.

He told the gathering: “Among all the states in the Niger Delta region where there is crude oil theft, Delta State is the least affected. I am happy to say that security in the state has improved tremendously as kidnapping, piracy and oil theft have reduced”.

Uduaghan announced the setting up of a new task force meant to overcome the challenges of jurisdiction and prosecution of suspects, adding that oil theft suspects

Among all the states in the Niger Delta region where there is crude oil theft, Delta State is the least affected would now be effectively prosecuted since it was now a federal offence.

The governor maintained that until all those involved in the vandalism of pipelines and oil theft were brought to prosecution, irrespective of status, the nation might not

see an end to the problem as he commended the Federal Government its efforts so far to tackle the problem.

He asked the transition committee chairmen, the traditional rulers and the entire people of the Niger Delta region to cooperate

with government and security agencies to checkmate incidents of oil theft.

“It is not the money being lost through oil theft that is the issue, but the damage to the environment through pipeline vandalism and sabotage. It is not in our interest as we bear the brunt of the physical damage associated with the oil theft, especially the contamination of the air, water and food chain and the genetic mutations for years to come,” Uduaghan said.

2013 October, SweetcrudeReports

Community

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Chevron GMoU scheme in Pictures

Chevron GMoU scheme was developed to directly and positively affect the lives of Nigerians across its areas of operation (host communities).

Not a few communities have benefitted from this scheme. The pictures below tell the story.

Jisike RDF Keke Transportation Scheme for youth empowerment programme

Electricity Project in Amakpu/ Umuamaka village in Jisike

Children fetching water from a water facility provided by EGCDF at Dagbolo

Capacity training workshop at a skill acquisition centre provided by Itsekiri RDC

One of flats built by Itsekiri RDC at Omadino

Kula Cabbies Scheme

Monarch warns on dangers of illegal dredging TOJU VINCENT

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he Akran of Badagry, De Wheno Aholu Menu Toyi I, has warned of grave danger ahead if the activities of illegal dredging along the creeks in Lagos, especially in Badagry, remained unchecked.

He sent out the warning at the 7th National Dredging Summit and Exhibition, NDSE, in Badagry, saying something needed to be done urgently to arrest the illegal activities that are beginning to negatively impact the environment seriously.

According to him, the continuous dredging of sand from the creeks by young

men is threatening islands around the area.

The Akran pointed to two peninsula communities in particular, Ajedo and Okogbedu where the land space between the ocean and creeks has gradually reduced over the years to about 50 metres. He pointed out that unless something urgent was done about the development, all communities along the vicinity may soon be flooded by water from the ocean. “Should this be allowed to continue unchecked, the proposed road construction from Takwa-bay to Badagry would no longer be possible� he said.

He also complained about the activities of illegal surface sand mining that is

The royal father however commended the Lagos state government for giving approval to dredging firms to provide sand to meet the need of the people. He noted that along the stretch from Topo to Marina, there are dredgers pumping sand from the river as a means of discouraging illegal dredging activities threatening parts of the roads along the Mile 2 – Badagry expressway following the artificial lakes created by the illegal sand miners.

He warned that those portions of the road may soon be cut in two unless action is

taken urgently.

The royal father however commended the Lagos state government for giving approval to dredging firms to provide sand to meet the need of the people. He noted that along the stretch from Topo to Marina, there are

dredgers pumping sand from the river as a means of discouraging illegal dredging activities.

He observed that but for the efforts of the Lagos state government in controlling the activities of illegal dredging, part of the state may have sank.

Earlier in his opening remark, Programe coordinator of NDSE, Mr. Edmund Chilaka, said that the programme is an annual gathering of dredging, maritime and marine sector operators and stakeholders to deliberate on the state of the industry with a view to improving services, expanding the knowledge base of the practitioners and contributing to the growth of indigenous operators.

2013 October, SweetcrudeReports

A Piece of Prophetic Journalism It was in September 2010 that I published the article reproduced below in Sweetcrude to warn Rivers people and the World that the boy – governor, Chibuike Amaechi had orchestrated a campaign to undermine democratic practices in the state. He was the aggressor at the time, deploying the police but failing with the courts to undermine the Rule of Law of and consequently, of democratic governance.

Governor Amaechi is the cheer leader for democracy these days, joining four other governors of the Peoples Democratic Party to jeopardise the fortunes of the party instead of moving out of the party as Amaechi advised his adversaries years ago. Now the pigeons have come home to roost as the factional headquarters of Amaechi’s group has been sealed by the police! How our sins manage to live with us. Enjoy this piece of prophetic journalism.

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E-mail: johniyene@yahoo.com

. . . AND A MEMO TO MY PRESIDENT & KINSMAN Mr. President, You ought to know certain truths now; truths such as that in 2011, I voted Mohammadu Buhari as a Nigerian Patriot because I felt he had better credentials than you. You see, in Nigeria, there is no difference between naivety, ignorance and patriotism. That was Chukwuma Nzeogwu’s sin. And that was my sin in 2011. But no more because I have received the precise education of our friends the Yoruba who teach us that you cannot be a good Nigerian without being a dedicated Yoruba. The Yoruba are a special breed. Their dislike for Olusegun Obasanjo changed into love overnight when he won the national elections. They trooped to the Abuja Stadium with strains and versions of “Ose oh Baba” when his administration was inaugurated. Meanwhile, they had not voted for him at the elections. My conversion into a hardcore Ijaw man was complete when, even after your inauguration, the Hausa/Fulani of Northern Nigeria who had joined me in voting Mohammadu Buhari for tribal, religious and regional affinity, started to give you notice that they shall do all in their powers to destabilise your government, not for your lack of experience or credible performance but because you are Ijaw and from the South

RIVERS: PROGRESSION TO ANARCHY

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lthough there was warning enough, Rivers people were still shocked when the news broke that their government had revoked the right of occupancy it granted several years ago to the owner of No. 25 Ohaeto Street, D/Line in Port Harcourt. The landlord’s sin was that his new tenants were members of the executive committee of a faction of the People’s Democratic Party. Days before, the factional leaders had been arraigned before a Port Harcourt magistrate who had the integrity and independence of mind to grant them bail pending the determination of the trial or the receipt of the opinion of the DPP as to whether the proper offence to charge them with was cultism! Some senior civil servants alleged that a top government house official gathered them and warned them not to sign the bail bonds of the accused persons.

The Nation reported that the Rivers State government revoked the poor bloke’s right of occupancy for the overriding public interest of establishing a health centre therein!

Anybody who knows the D/Line neighbourhood of Port Harcourt well will find this reason ludicrous and hilarious because the Rivers government has several buildings between Wogu and Khana Streets, a more central part of D/Line, it abandoned a decade ago and is now being occupied gratis by the homeless. These primitive acts of political intimidation may have gone unnoticed in another state; it was in Rivers State that a government in power deployed cult figures to wipe out a community (Okuru Town) where an opposing party held sway, to ‘annex and occupy’ others and to terrorise the Southern and South Eastern suburbs of the city of Port Harcourt for political ‘disloyalty.’ The fear of most Rivers people is that in just the same manner as it happened during the last administration, there would be reactions from the victims of these wanton displays of raw power, invoking another wave of insecurity upon them. In so short a time, the government in power which sprang from the beneficence of opposition to the intimidation of a section of the PDP has forgotten the lessons its predecessor learnt about political tampering and manipulation.

Every citizen of Nigeria has a constitutional right to associate with others freely and to advance any agenda that is not forbidden by law; it is the obligation of every citizen to meet with others of like mind to plan the removal through the ballot of a government that does not advance the interest of its people. This may appear ‘criminal’ to unenlightened and unsophisticated African politicians but the whole essence of democracy is a people’s ability to renew their drive to achieve the best possible levels of development through the instrumentality of responsive representatives. The lesson of history is that within short spells of time the leaders who formulated bad policies become the citizens who suffer their effects but always its significance does not gain much currency with leaders of the day.

It is hoped the Amaechi government will retrace its steps and allow the PDP, the civil courts or the people to decide what is desirable or just or criminal. The people of Rivers State deserve to enjoy the lasting peace that Yar’Adua’s amnesty promises them.

President Goodluck Jonathan

Gov. Chibuike Amaechi South region where Nigerian Presidents are not supposed to be made from. Take notice, sir, that being a hard core Ijaw man does not mean I have lost all interest in the factors that will bring about positive change to the Nigerian polity.

The difference now is that if the Yoruba can queue behind Obam Ezigbo and the Hausa/Fulani can lay their lives down for a nonreason like religious affinity, I should and I am now able to queue behind an Ijaw man, a PH.D, a son and scion of the Niger Delta who has held these tentative bonds called federalism together in moments of trial and of peace like a commensurate diplomat and a matador.

But now, I must bring to your notice a matter of grave importance which affects you and your place of birth, the Niger Delta.

The construction of the East West Road, the road that promises a true flow of traffic from Oron in Akwa Ibom State to the outskirts of Benin City, is a matter of utmost importance for all of us from that region. When your tenure as President has elapsed with the natural passage of time, you shall be required to oil and maintain the myriad of relations you are acquiring now as President, with the difference that you shall deploy the offices of the East/West Road as the Air Force would have withdrawn their services.

The contract to construct the East/West Road was awarded by the Niger Delta Ministry to a disreputable company, SETRACO, the same company that took about 10 years to resurface the Enugu/PH Expressway. At the crawling pace that company is going about its duties, you may require three more terms to see to its completion. It is only at the bottom of the Engenni and Patani Bridges that you would see construction activities presently. From the Engenni end of that bridge to Kaiama Bridge, the second lane of the road has not even been marked out. If I am not mistaken, that is your own neck of the woods, Mr. President. Traffic control on the road is abominable; there are no signs to indicate dangerous spots, collapsed culverts or diversions on the road so that a motorist is left to the navigational skills of more experienced users or the vagaries of chance! About 1 km out of Bomadi Junction, towards Ughelli, there is a gully that was dug

by SETRACO which has the potential of claiming as many lives as drivers are ignorant of the spot because there simply is no sign to indicate the gully.

What sir, is the rationale for awarding such a huge contract to one company? Why was the contract awarded a company with a poor pedigree? Again, are there no exit clauses the ministry can take advantage of to revoke its obligations? The Sagbama stretch of the road before Patani tells the story of the whole project, of a sanded second lane overgrown with weeds for lack of activity.

Mr. President, your detractors, like the simpering idiot, Amaechi have talked about your seeming disinterest in the timely execution of this project. We, your brothers, who traverse aspects of the road from Igbedi to Akipula, within a catapult distance from your late father’s grave, and from Patani to Otowvodo, are now calling upon you to do something of the pace and quality of work at the East/West Road.

2013 October, SweetcrudeReports

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