$10 Billion Gas Project: National Assembly, NLNG head for showdown over contract details

$10 Billion Gas Project: National Assembly, NLNG head for showdown over contract details

The contractors handling the $10 billion NLNG Train-7 gas project in Bonny Island, Rivers State, have denied a committee of the National Assembly access to the project details, stating they are acting on instructions from the management of Nigerian LNG Limited (NLNG).

The joint committee of the National Assembly on Gas is in a running battle with Saipem Contracting Limited, an Italian-owned company, and Daewoo Engineering and Construction Limited over the project’s details.

However, the two contractors have maintained a gag order, citing a non-disclosure agreement signed with NLNG.

PulseNets obtained documents showing that NLNG, in which Nigeria holds a 49 per cent stake, instructed the two contractors not to disclose the contract details to the lawmakers, setting up a potential showdown between the federal legislature and NLNG.

According to the documents, NLNG not only instructed the contractors not to provide the lawmakers with any information regarding the project but also questioned the committee’s power to embark on the probe.

NLNG is an incorporated joint venture owned by four entities: NNPC Limited, on behalf of Nigeria, owns 49 per cent of the company; Shell Gas B.V. holds 25.6 per cent; TotalEnergy Gaz and Electricité Holdings has 15 per cent; and Eni International N.A.N.V. S.ar.I owns 10.4 per cent. The company currently operates six LNG trains.

In 2019, the shareholders of the company made the final investment decision for the Train-7 project to expand its gas production capacity from 22 million tonnes per annum to 30 mtpa. The Engineering, Procurement, and Construction (EPC) contract was awarded to a consortium of Saipem, Chiyoda, and Daewoo.

Genesis of battle

The battle between the committee, co-chaired by Jarigbe Jarigbe, the chairman of the Senate Committee on Gas, and Nicholas Mutu, the chairman of the House of Representatives Committee on Gas, and NLNG started in March when the lawmakers wrote letters to all the concerned parties in the project, requesting the project details and asking them to appear before the lawmakers for an investigative hearing.

The first letter, signed by Messrs Jarigbe and Mutu and dated 27 March, was sent to NLNG, Daewoo, Saipem, the Minister of State for Gas, and others.

In the letter, the committee requested access to the contractual agreement signed with NLNG and details of the variations made on the project. The committee also scheduled a hearing for 18 April.

“The purpose of the briefing is to gain clarity on various aspects of the project, including but not limited to the contractual agreements between Daewoo Company and NLNG. Specifically, we request access to the contractual agreement signed with NLNG, as well as any variations requested and subsequently granted on the cost of the project,” the letter reads.

The committee added, “Your expertise and first-hand knowledge of the project will be invaluable as the joint committee assesses its impact on our national gas infrastructure and economy. Additionally, your input will aid us in identifying potential areas for legislative support or intervention to ensure the successful execution of this vital project.”

Highly placed sources in the committee told this paper that Saipem Managing Director Michele Poggi appeared before the committee on 21 May but refused to provide the requested information, which infuriated many lawmakers, who interpreted his (Poggi) action as disrespectful to Nigeria’s parliament and government.

The lawmakers subsequently adjourned the session until 5 June and sent another set of letters to the contractors, NLNG, the minister, and others.

In the letters, the lawmakers reiterated the demands made in the previous letters.

“Do not give committee any information” — NLNG

The contractors, through the managing directors — Mr Poggi for Saipem and TacWon Jung for Daewoo — responded to the committee in separate letters, stating they are bound by the non-disclosure agreement they signed with NLNG not to share the contents of the EPC contract with anyone, including the committee.

Meanwhile, the contractors stated that they sought NLNG’s consent to share the contract details with the committee. However, NLNG mandated them to decline the request.

PulseNets observed that the responses from Messrs Jung and Poggi were identical—the letters were verbatim, with only the address and signature differing.

In the letter, NLNG instructed the contractors to decline the request, stating that the lawmakers’ actions “are not in accordance with the law and might trigger confidentiality concerns.”

“We respectfully reiterate that the disclosure of the EPC Contract Agreement, as well as details of any variation requests concerning the NLNG Project, is not within our sole discretion as the contract specifically contains confidentiality provisions that forbid the disclosure of its contents and other project information to the authorities without NLNG’s express written consent. In compliance with the contract provisions, we had notified NLNG of the joint committee’s request and forwarded copies of your letter to NLNG.

“However, NLNG has withheld its consent to the disclosure on the basis of a legal opinion rendered by their external solicitors, according to which the invitation and request for documents by the joint committee “are not by the law and might trigger confidentiality concerns,” the letter reads in part.

Furthermore, NLNG challenged the limits of the National Assembly’s and its committees’ investigative powers, stating that the investigative authority of the lawmakers is not unlimited.

“Moreover, according to NLNG, ‘the investigative power of the National Assembly is not at large but is circumscribed as recognised and endorsed by the courts.’

In light of the foregoing, NLNG declined to give its consent “to provide or disclose to the joint committee any information or documentation related to the NLNG project and directed us to share their concerns with the joint committee.”

Counter moves

In the letter, NLNG instructed the contractors to demand a resolution of the House and Senate that gave the joint committee the authority to investigate the project. Therefore, the contractors are asking for gazetted copies of the resolution.

“Given the above, considering the provisions of section 88 of the 1999 Constitution of the Federal Republic of Nigeria that regulate the terms and conditions under which the National Assembly exercises its powers, we will appreciate your obliging us with the gazetted copy of such a resolution or as published in the National Assembly’s journal as prescribed by law. We believe that this may go a long way in reassuring us of the constitutionality of the powers being invoked by the joint committee.

“We are, therefore, regrettably unable to provide the relevant information, notwithstanding our general disposition to support the joint committee in its law-making efforts. We assure you of our continued commitment to operate within the ambit of the law and appreciate your understanding of our constraints in this instance,” the letter reads.

PulseNets was unable to confirm if a motion to investigate the NLNG Train-7 project was moved in either the House or Senate.

Meanwhile, Order 20 Rule 58 of the standing rules of the House of Representatives gives the House Committee the power to oversee the NLNG.

The contractors and NLNG are scheduled to appear before the committee again on Thursday.

Also Read: NNPC, NCDMB, IOCs sign MoU to reduce contracting cycle

This paper learned from reliable sources within the committee that the last sitting was adjourned to allow the committee to adequately respond.

A committee member, who did not want to be named because he was not authorised to speak, said members are keenly watching how the co-chairmen of the committee, Messrs Jerigbe and Mutu, would respond to NLNG’s stance, stating that anything other than the full application of the legislative power of the National Assembly will be met with protest from members.

The lawmaker stated that “any attempt to sweep this investigation under the carpet will be resisted.”

The committee’s options could involve seeking the permission of the two chambers to issue a warrant of arrest against everyone involved to compel their appearance.


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