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UPDATE 1-Nigeria LNG pays $140 mln to end blockade on its ships
July 12, 2013 / 5:51 PM / 4 years ago

UPDATE 1-Nigeria LNG pays $140 mln to end blockade on its ships

* Blockade cost $475 mln in lost revenues over 3 weeks

* NIMASA says will lift blockade when payment made

By Tim Cocks

LAGOS, July 12 (Reuters) - Nigeria’s maritime security agency has agreed to lift a three-week blockade on Nigeria LNG’s ships, which had cost $475 million in lost revenue, after the company agreed to pay a levy “under protest”, NLNG said.

The Nigerian Maritime Administration and Safety Agency (NIMASA) had blocked liquefied natural gas ships from leaving the Bonny terminal for the past three weeks because of a dispute over unpaid levies, which NLNG argued it was exempt from paying.

The two sides settled on a payment of $140 million.

The lost revenue amounted to three times the $158 million that NIMASA had been demanding in back taxes.

“The blockade had also led to ... reduction of domestic gas to power and a shutdown of offshore and onshore production facilities,” NLNG said. Its gas shipments account for 9 percent of Nigeria’s total exports.

NLNG is 49 percent owned by Nigeria’s state oil firm, 25.6 percent by Shell, 15 percent by Total and 10.4 percent by Eni.

As well as clearing the back levies, NLNG also said it would in future pay the 3 percent levies demanded of it.

“We will lift the blockade as soon as payment is made as agreed by the parties. They have to start paying in future,” NIMASA spokesman Isichei Osamgbi said. “We are glad it is over.”

The NLNG statement said the company would continue to argue that it is “exempt from NIMASA levies under the terms of the NLNG Act”.

A court had ruled twice that the maritime agency and security company Global West should end the blockade, but the ruling went ignored.

Security sources say Global West is run by a former Niger Delta militant, Government Ekpumopolo, nicknamed “Tompolo”, although he is not officially on its board.

Tompolo was one of several ex-militant commanders in the Delta who were paid off under a government amnesty programme in 2009 to end attacks on oil installations that at one point had cut production by half.

Buyers of Nigeria’s LNG include Spain’s Repsol, Italy’s Enel, Britain’s BG Group France’s GDF Suez and Portugal’s Galp.

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