Nigeria will lose some prized assets while handling its N24.9 trillion debt (Image via: Alternative Africa)

P&ID to Seize Nigeria’s $9bn Assets Over Failed Gas Plant Deal

Kirana Chandra Mumpuni Budiana
Business & Industry
Plant and Chemical
Aug 17, 2019
2764
Process and Industrial Development Limited (P&ID) was given a green light by British court to seize Nigerian assets worth $9 billion. Nigerian government and P&ID had been caught up in long-time battle over a failed deal about gas plant in Calabar, Cross River State, Nigeria. Now the fight reached to the end where Nigerian government is about to lose 20% of Nigeria's declared foreign reserves. In 2017, the penalty for Nigeria was $6.6bn (£5.4bn). But the London court just added $2.4bn in interest, which made a bigger number for Nigeria to pay its fault.

Nigeria had tried to argue that the deal was made under Nigerian law, so the seat of the arbitration was Nigeria. The court rejected Nigeria’s argument. Then Justice Christopher Butcher of the Commercial Court in London said that he was ready to make an order enforcing the final award. So the conclusion was already made. The court had changed the 2017 arbitration award into a legal judgement. Therefore, Nigeria’s assets seizure by P&ID is allowed. The barrister representing P&ID, Andrew Stafford QC, said that the process of assets seizure will begin immediately to satisfy this award. Meanwhile, Nigeria's solicitor general Dayo Apata stated the government wants to appeal against the conviction.

The problem began in 2010 when P&ID entered into a 20-year gas and supply processing agreement (GSPA) with Nigeria to build the newest development result of gas plant. The goal of the agreement was to refine associated natural gas into non-associated natural gas to power the national electric grid. It was planned that 85% for Nigeria to receive the non-associated gas at no cost for electrical generation and industrialisation. On the other hand, P&ID would receive 15% of byproduct (methane, propane, butane) to sell on the commercial market.

Nigeria was required to supply 150 million standard cubic feet (scf) of the gas per day to P&ID. Then the number was rising to 400 million scf. Nigerian government also had to build a gas supply pipeline to the P&ID facility. Those were failed to be fulfilled by Nigeria and it went down to the long dispute between two parties.

Source: https://www.bbc.com/news/world-africa-49377517

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