NLNG Is Managed Entirely By Nigerians

Let’s take a quick count: two world class companies at the price of one, revival of the maritime shipping industry and grooming of elite manpower for the shipping industry and LNG industry, excellent community relations that has made Bonny a haven of sorts with 24/7 uninterrupted electricity for 16 years and counting, most prestigious prizes for science and literature in Africa and revenue that is envy of contemporaries and windfall to country and shareholders, successful Nigerianisation policy that yielded entire Nigerian management and entire Nigerian workforce.

By whatever measure, Nigeria LNG Limited has shown compatriots what a world-class company should be and other companies the road less travelled. Read second part of the interview to understand the love-love relationship between NLNG and Nigeria and how it lives its motto, helping to build a better Nigeria.

ONE of the areas of interest to Nigerians, in terms of contributions, is Nigerian Content. NLNG has been in existence for over 14 years. It will be nice to know what kind of contributions it has made to the development of Nigerian Content.

In my experience in the oil and gas industry of over 20 years, I don’t know of any other company that has done as much as NLNG in the area of Nigerian Content. Let me take an area like shipping for example, where NLNG has basically kept the maritime industry alive, especially after Nigerian National Shipping Line became defunct. Today, NLNG directly owns 13 LNG carriers and 11 others on long-term finance leases. So, there are 24 LNG carriers that NLNG operates today with more than 1,000 maritime staff that have been trained, many up to captains and chief engineers. There is no other Nigerian company today that owns Very Large Crude Carriers (VLCC) to carry oil or a vessel to carry gas in this magnitude. NLNG has also commenced the building of six new and bigger LNG carriers. On the back of this, over 600 Nigerians will be trained in various aspects of ship building. In addition, Nigerian manufactured products like cables, electrical, paints, furniture and several others are to be used in the ship construction. The company is also progressing with the shipyards to establish a dry dock yard in Nigeria. These are significant and it demonstrates the value NLNG brings to the country, true to its vision of helping to build a better Nigeria.

When is the dry dock facility coming?

We just recently awarded the contract for the six ships and the dry dock is expected to ride on the back of the construction of these ships. Work is ongoing at this stage to identify location and carry out front-end work. It is coming.

Having looked at all these profits and gains, are you concerned about lack of progress in your sister companies, namely Brass LNG Limited and Olokola LNG Limited where investors are still pulling out?

For us as a company, and as Nigerians, the expansion of LNG projects in Nigeria, that is Brass LNG, OKLNG and Train 7, is something that we welcome and would be a lot happier to see come into fruition ahead of other countries. Nigeria has huge gas reserves, over 187 trillion cubic feet (tcf) of gas, and countries like Australia that don’t have half of what Nigeria has is able to build LNG projects that will produce up to 80 million tonnes per annum (mtpa) whilst still meeting all its domestic power needs. We are still doing 22 mtpa.

We know that Nigeria still needs to completely put out gas flares, continue to monetise gas resources and earn additional revenues for all the developmental needs. NLNG has shown that it is possible to achieve these objectives despite the difficult environment. Seeing to the execution of these projects in a timely manner will help Nigeria achieve these objectives. As we work on Train 7 expansion, we have also been supportive of these other projects, in sharing with them some of our experience and expertise, and having a number of them come and work with us so that they can learn how we have made our achievements. We fully support to get all of these projects going, especially faster than other countries.

It is a huge business you are running. What are the things in Nigeria that keep you awake?

Firstly, the security situation is one; to keep our staff, our pipelines and our huge plant safe is a big concern. Whilst we have seen improvement in the security situation, we still witness quite a lot of security challenges. Another thing that keeps me awake is the opportunities that are slipping away from us as a country especially as the rest of the world is making progress, whilst our projects are stalled —Brass LNG, OKLNG and NLNG Train 7. There is the sense that the rest of the world is leaving us behind and the windows to premium markets are closing.

Making sure that our plant continues to sustain high asset integrity and high reliability also keeps me awake. If you look at the Nigerian environment and similar types of companies, like the refineries, you will see that achieving 97 percent reliability is quite a huge achievement and a big challenge in Nigeria. This needs continuous focus on maintenance and refurbishments.

We will like you to give us a more picturesque view of how much contribution the company has made in terms of putting out these flares and therefore, ameliorating the environmental conditions in the Niger-Delta.

Before NLNG came on stream in 1999, the level of flaring in the country was between 50 to 60 percent, but by the end of 2008, when we completed Train 6, more than half of the flaring had been extinguished. That the level of flaring in Nigeria today is down to around 20 percent is mainly because of NLNG. The additional benefit of this is how much revenue has come to Nigeria. More than 1,500 cargoes have been produced from gas that used to be flared, which in monetary terms, is well over $ 30 billion. So we have been able to reduce the environmental impact of flaring on the people in the Niger-Delta by more than 60 percent.

One of the factors responsible for the success of the company is the host communities. What would you like to do for your communities?

We have already done a lot in Bonny. There is 24-hours power in Bonny and Finima. Pipe borne water is now being provided and several roads and schools have been built as well as the over N500-million-funded micro-credit schemes, HIV programme, scholarship schemes, etc.

Looking forward, there are two aspects of what we want to do. Firstly, there are still a number of projects like housing and model secondary schools, amongst others, that we intend to provide but we need the communities to provide land and avoid litigations. The availability of unencumbered land has been a major delaying factor. Secondly, we want to work with the communities to enable the creation of alternative businesses in Bonny. NLNG can only employ about 2,000 people at most, but there are much greater opportunities in other industries, especially agro-based industries and fisheries, that can create more employment opportunities for Bonny and our communities and enable entrepreneurs to grow. This is an area we have started work on, with the community as well as international agencies and our partners in the Joint Industry Companies (JIC), to turn Bonny around into a more self-sustaining community that depends less on the oil industry. And Bonny has that kind of capability. That is the future we are working together to achieve.

Your company gives so much support to education, through The Nigeria Prize for Literature, The Nigeria Prize for Science and in so many other areas. Why all these interest in education?

Being a company that is built on science, you can understand why science is of interest to us and why continuing to have the country produce science capabilities is important to us. Such will also help the country to develop and realise its potentials. Any country that lacks science capability will struggle. On literature, the country has produced a Nobel Prize Laureate and has the potential to produce more laureates, so we are clear that the future of the country can only be better when the quality of our education output is of a world-class nature. And we believe that Nigeria has the potential to achieve quite a lot with better education. We have already seen excellent winners in the past. By providing this avenue, we have been able to bring out and celebrate some of the success stories in Nigeria and create inspiration for others to excel.

Closely related is the question of Nigerianisation; it appears that your management stream is made up of Nigerians only. And yet you are making these kinds of strides world-wide. How did you achieve all these?

The Nigerianisation agenda was driven right from the beginning by the shareholders and the directors, so the company didn’t just arrive here by accident. It was a deliberate agenda and investments were made to train, develop and have people grow into these positions. When you see the Nigerians in these positions, they are there on merit. In addition, the company was built on a partnership between the national oil company, NNPC, and international shareholders, and this model has enabled us to get the best of both worlds; the best of what the international companies can bring in terms of technical know-how, experience and development of Nigerians, and the national oil company ensures a focus on how to build a better Nigeria. So that combination has been very healthy and it is one we would encourage others to replicate. The independent board is also a big plus as decision making is a lot quicker and focused on the best interest of Nigeria and how to achieve international standards. In our technological environment, this is a very good mix. This has also played a very key role in making us achieve the feats. LNG is a new technological field and two other companies struggling with it haven’t even taken off. Yet, NLNG recently let its workers go through a voluntary severance scheme. Is it naivety, self-confidence or arrogance to let go of people who so much have been spent on to develop; letting go of them at young age? In any organisation, it is inevitable that people will come and go. An organisation must be healthy enough to build a pipeline of talents. You have to build an institution rather than be dependent on individuals. NLNG recruits the best, so, we have that natural flow. In addition, we have also benefitted from the experiences of our shareholders. NLNG has a robust and resilient system despite the coming and going of streams of workers. Also note that over 90 percent of those who left were from non-technical areas. It is to the credit of NLNG that it created an avenue for people to opt to go, on a voluntary basis.