As Nigeria goes on appeal to set aside the huge cash awarded by a British commercial and arbitration court to an offshore compaany over a botched gas supply contract, indications emerged, weekend, that the government might have written off the claimant as non-existent enterprise.
The government is said to have been convinced by several documents at its disposal that the company, which claims to be registered in Nigeria and abroad, merely exists in the minds of those trying to extort money from Nigeria for rendering no service.
The argument of the government, Vanguard learned, stems from the fact that Process and Industrial Development Limited, P&ID, which claimed to have entered into a multi-million naira gas supply business with Nigeria does not have any registered presence anywhere.
Citing a document filed in court by the company, a top government official said the address of a multimillion naira company involved in engineering and gas procurement business was simply “using a lawyer’s office and post office box as its corporate address.”
The court document sighted by Vanguard last night shows that P&ID’s address in Tortola is attached to ‘Trident Chambers, P.O. Box 146 with no physical complex of its own in the BVI.
Similarly, efforts by a team of Economic and Financial Crimes Commission operatives to locate its Nigerian address quoted in the court paper as 12, Vaal Street, Maitama, Abuja, has proved abortive.
“There is no such office in Maitama and the people we found there have no idea of such a company operating in the place,” a top EFCC official confirmed last night.
Vanguard gathered last night that the government is likely to argue that the controversial entity does not deserve to be awarded such huge amount, especially as it does not have any known presence either in Nigeria or anywhere else.
It is also to argue that the company didn’t bring any capital importation into the country and never invested a dime to warrant any compensation.
It said: “This government will not negotiate with questionable characters who are merely seen to be actively trying to extort money from the government and people of Nigeria.
“It is obvious from the documents available before us that some elements in Nigeria have connived with some foreign collaborators to rip off the commonwealth of Nigeria.”
How project failure affected Addax Petroleum’s plan to end gas flaring
Meanwhile, the failure of the controversial P&ID’s gas pipeline project scuttled the plan of Addax Petroleum Nigeria Limited to end associated gas flaring in Oil Mining Lease, OML 123.
Investigation by Vanguard, weekend, indicated that OML 123 is Addax Petroleum’s largest licence area, located offshore approximately 60 kilometres south of Calabar, Cross River State and covers an area of 90,700 acres (367 km2), with nine producing oil fields – Adanga, Oron West, North Oron, Ebughu and extensions, Adanga North Horst, Inagha, Kita Marine, Bogi and Mimbo.
Addax Petroleum, which started operations in Nigeria after signing two Production Sharing Contracts, PSCs, in 1998, with the Nigerian National Petroleum Corporation, NNPC, had concluded plan to harness and deliver 100 million standard cubic feet, scf of associated gas to P&ID Limited for processing.
The top management personnel of the company, including the managing director, Mr. Yonghong Chen, did not take telephone calls nor respond to emails, when Vanguard contacted them repeatedly for comments, yesterday.
But a source in the Department of Petroleum Resources, DPR confirmed that associated gas flaring has not ended in OML 123.
Why P&ID selected Addax
The founder of P&ID, Michael Quinn, who explained how Addax Petroleum was selected as gas supplier recently said: “From information available in the public domain and from our own researches, it was clear that there was more than enough Wet Gas off the coast of Calabar to support a gas stripping and propylene plant operation in the Calabar area processing a Wet Gas throughput of 400 MMSCuFD We also became aware that the Government had initiated the building of a pipeline from OML 123 to Calabar (the Adanga Pipeline).
“At this stage we felt that we were in an excellent position to make a persuasive case to the Government to enter into an agreement to implement the Project. The President of Nigeria at that time was the late President Yar’Adua. He was also the Minister of Petroleum Resources, although he later appointed a separate Minister.”
He said: “In summary our proposal was that we would take Wet Gas free of charge from the Government, process it to produce Lean Gas, and return the Lean Gas to the Government free of charge to be fed into the national power grid, with the capacity to generate over 2,000 additional megawatts of electricity for the economy. The idea was for P&ID to generate revenue (and profit) from the NGLs.”
He said: “There would be two phases. Phase 1 would be the construction by P&ID of the gas stripping plant which would separate the NGLs from Wet Gas, at the end of which process would emerge, amongst other by-products, propane, butane, condensate and Lean Gas. The propane, butane and condensate would be sold on the international markets for P&ID’s account, and the Lean Gas delivered to the Government free of charge. Phase 1 was planned to take two years to implement after the grant of the necessary approvals by the Government.
“Phase two would be the construction by P&ID of the polymer grade propylene plant. Once constructed it would use the propane produced by the gas stripping plant as a feedstock for the propylene plant to produce polymer grade propylene for sale on international markets. Polymer grade propylene is a valuable industrial feedstock for the manufacture of various different products, and would be expected to achieve a significantly higher price than the Propane. Lean Gas would continue to be delivered to the Government free of charge. Phase 2 was planned to take an additional 15 months to implement.”
Aftermath
He said: “The day after the signing of the GSPA, on 12 January 2010, I wrote to the Minister on behalf of P&ID to inform him that P&ID wished to commence work at once, and wished “to put in place all necessary modalities as soon as possible, with both Addax Petroleum and Exxon Mobil, in order to ensure the timely delivery of the currently flared Wet Gas for the project” (page 152 of MQ1). Given that P&ID had no contractual relationship with the IOCs, I requested the support and co-operation of NNPC, NAPIMS6, and the Director of the DPR to assist in finalizing these arrangements with the IOCs.Close
“I was keen to implement the GSPA as soon as possible. Moreover, although I was aware, of course, that the Government had, to all intents and purposes, access to virtually unlimited supplies of Natural Gas in the vicinity of Calabar, I wished to minimize any delay which might be caused by the operators of the 2 concessions that had been identified as likely sources of Wet Gas for the project. P&ID required from the Government certain up to date information which would be critical to the construction of the gas processing facility which P&ID would be building in Calabar to strip the Wet Gas.”
Site selection
He said: “In the meantime, the site for the onshore plant at Calabar for thise construction of the gas stripping plant and gas storage facilities had been selected by P&ID and secured from the Government of Cross River State. On 1 February 2010 Mr. Hitchcock wrote to the Governor in Calabar requesting the formal allocation of the land upon which the plant would be constructed (pages 157 to 158 of MQ1). On 16 February 2010 approval was granted, by the Government of Cross River State, to P&ID, for the allocation of Parcels 1 & 2 of the Energy City (Industrial) at Adiabo in Odukpani Local Government Area, containing an area of about 50.662 hectares of land, for the industrial use of P&ID (pages 159 to 160 of MQ1).”
Construction
Unfortunately, construction of the project did not commenced, a development which scuttled the initial plan to utilise associated gas from Addax Petroleum.
Read the original article on Vanguard.