The recent commissioning of Nigeria Liquefied Natural Gas (NLNG) Trains 6 and 7 by the Chief Executive Officer in South Korea marks another step in Nigeria’s consolidation of her gas resources, writes Correspondent, SAM NWOKORO.
Any time the story of Nigeria’s oil and gas conservation is written, the name of one man, Mr. Babs Omotowa, will certainly dominate early pages. The qualification has nothing much to do with the fact that Nigeria’s landscape is brimming with oil and gas resources, but that the man has, with sheer ingenuity, soldiered more than other policy executors in the petroleum sector in the tricky aspect of Nigeria’s gas conservation and harnessing. Prior to the coming on stage of Omotowa as the CEO of NLNG, that parastatal had been making do with just a few ships, a little less than 10, in the late 1990s. But today, the NLNG boasts about more than 23 ships and has just taken delivery of its sixth and seventh trains in Pusan, South Korea.
No doubt, a grateful nation, which has been reeling under its incapacity to effectively harness her abundant gas resources, has been heaping adulation on Omotowa since his return, recently, from South Korea where he went to take delivery of those ships. Online news blogs and portals which monitor Nigeria’s oil and gas sector have not been short of encomia for the technocrat since the later part of November. One from Nigeria’s Oil and Gas Monthly said of him: “The recent acquisition of the two latest ships among the four the company plans to acquire by the end of 2016 will definitely impact positively on the profitability of the agency. In the next few years, there will be high demand of gas in Europe and Asia. So it is good Nigeria keys in the impending markets. It will also save Nigeria’s over-reliance on crude export.”
Another said: “Babs Omotowa has grown NLNG into a world class enterprise, the largest liquefied natural gas company in Africa. Nigeria will have to do more on gas-flaring by passing the Petroleum Industry Bill (PIB) as it pertains to gas exploitation, so that Nigeria derives maximum benefits from her resources.”
Why NLNG matters
There is no doubt that Nigeria is blessed with abundant mineral resources. But for long, Nigeria’s sweet crude has been so brazenly exploited to the point that the country is even running out of reserves that can cushion her future developmental aspirations. Nigeria is even planning to raise $500 million (about N100 billion) to explore and harvest more fallow fields in an effort to shore up reserves.
But the good news is that all the investments of the NLNG are geared towards conserving the country’s gas reserves, so as to ensure there is a future for the children of the nation. NLNG was founded to harness Nigeria’s vast reserves and produce LNG for the export market.
NLNG celebrated Nigeria’s 3,000th LNG export cargo in 2014. The company is now a six-train industrial complex, and has just acquired two of the proposed Train 7 and 8 from Pusan, built by Hyundai Heavy Industries of Korea. The combined annual output of its six trains is 22 million metric tonnes, amounting to about 7.5 per cent of global LNG supply, the largest in Africa. It has acquired a 23-vessel fleet that transports its product to various parts of the world.
Commenting on the new acquisition by NLNG, an online maritime website wrote: “NLNG’s recent acquisition is strategic in the nation’s oil and gas matrix. As Nigeria plans to turn around the country’s four refineries, no doubt more vessels would be needed for carrying gas cargos since much of Nigeria’s crude are crude-associated. Besides, there would be imminent demand of Nigeria’s natural gas, as the crisis in Middle East festers. Nigeria’s traditional gas customers in Europe, North America and Asia, according to experts, may in the years ahead look towards Nigeria the more to bypass the Middle East countries suppliers because of the uncertainty of markets as the fight against ISIS and other fundamentalist insurgents continue to reign.”
Another commented: “The acquisition of more trains will help the efforts in gas re-injection, exploitation and marketing as well as contribute in checking gas-flaring. The focus of policies in the years ahead would be shifting more towards gas because crude oil exploitation has gone on for long while we are wasting gas. The NLNG, to me, is the next best hope of the country in the energy sector with uncertainty in crude oil price.”
The two trains taken delivery of by NLNG are among the six which contract was concluded in 2013. The remaining four, Train 7 and 8, are expected to be taken delivery of by the second and third quarter of next year, according to projections. The orders were made through one of its subsidiaries, Bonny Gas Transport located in Bonny, River State. About 600 Nigerians had been given opportunity to acquire critical skills in the shipping sector of the company through the acquisition of the trains, as most of them participated in the construction in the area of design, welding, painting and fabrication.
The company has also spent over $21 billion in the joint venture feed gas suppliers till date, while about 60 per cent of this amount went to the federation account through its shareholding in the NNPC. It currently has a total of 23 ships on long term charter.
Economic value of an octopus
NLNG has four shareholders: one indigenous, three foreign. Incorporated in May 17, 1989 as a Limited Liability Company, NLNG celebrated its 25th anniversary in May 2014. With 100 per cent Nigerian staff, the company has remained the flagship of Nigeria’s local content policy. It has generated a little more than $100 billion since 1999, about 4.9 per cent of Nigeria’s Gross National Product (GNP). It has also saved about 40.6 per cent of gas that would have been flared, about four trillion cubic feet of associated natural gas, while paying an estimated N250 billion per annum as tax to the Federal Government, more than any other indigenous company.
The focused administrator
There is no doubt that Omotowa has proved to be one of the most valuable indigenous managers of a complex entity like NLNG. He has, by that, been of immense value to Nigeria. As one statesman commented about him recently in a public function, if all business entities Nigeria had interest in functioned as effectively as Omotowa and his team at NLNG, Nigeria would have been better than it is today.
As a man with deep insight into the condition of the people and who understands the huge expectation from him, Omotowa once said at a public function: “In Nigeria, we have a pernicious myth that even our people have elevated to orthodoxies. The prime one was that Nigeria was a mistake. Other myths include beliefs that nothing works in Nigeria, that we make great plans, but always have problems with execution, that we are individually brilliant but unable to produce good leaders. All we need to excel is dreamers of a certain type and quality: nation-builders who will respond to the yearnings of the citizenry for a platform to make a mark on the world; leaders willing to put national aspiration above personal, religious or tribal interests; men and women who believe in Nigeria’s ‘special-ness if only because Nigeria is the biggest black nation on earth.
“As we contemplate the future with cautious optimism, we earnestly pray that one day, all its contradictions and contrarian impulses will resolve nicely, even if miraculously, and Nigeria will rise like the mythical phoenix and take its rightful place in the world.”
Omotowa is the Vice President of Bonny Gas Transport before he became the CEO of NLNG. He was also the World President of the Chartered Institute of Procurement and Supply (CIPS) with headquarters in London.
He holds a degree in industrial chemistry and an MBA from University of Ilorin and the University of Leicester, United Kingdom. He was also a fellow of UK chartered Institute of Procurement and Supply and has put in over 30 years’ experience in the oil and gas industry.
He was also Vice President of Health, Safety and Environment, Infrastructure, and Logistics for Shell companies in Africa, a Director of Shell Petroleum Development Company (SPDC) Nigeria and Director of West Africa Gas Pipeline Company. There is no doubt that with his pedigree in the gas sector, Nigeria’s dream of ending gas-flaring by 2018 is achievable.