Management of the Process and Industrial Developments Ltd (P&ID) on Thursday denied either stealing General Theophilus Danjuma’s idea for building a gas plant or swindling him, stating that though owners of P&ID and the General were friends and partners, each had different plans of building gas plants.
The company also stated that the opportunity for Nigeria to reverse the judgment granting it the right to seize $9.6billion of the country’s assets over a botched gas plant building agreement had lapsed.
Bloomberg in an article titled, Is One of the World’s Biggest Lawsuits Built on a Sham?, published last week, reported General Danjuma as claiming that the gas project was originally his idea.
But P&ID, in a statement said, “General (Theophilus) Danjuma and Mr. (Michael) Quinn both saw the business opportunity presented by the burgeoning gas sector in Nigeria and the potential benefits to the Nigerian economy. General Danjuma’s preference was to build a full scale commercial propylene plant in Lagos, using feedstock gas purchased locally in Lagos. This was a perfectly good idea and would have been a landmark project.”
The statement added, “Mr. Quinn’s preference was to build a plant in the region of Calabar, to take advantage of the vast quantities of gas that was being wastefully flared in the area. The essence of Mr. Quinn’s idea was to structure a deal that would obtain the wet gas at no cost, and to return the processed lean gas to the government at no cost, making money solely by keeping and selling the extracted natural gas liquids such as propane and butane.”
According to the company, besides wanting to build a plant in Lagos, there was a relationship between P&ID and General Danjuma concerning the proposed gas plant in Calabar.
“The plan was for General Danjuma to provide the finance to build the plant. Had it gone ahead, it was envisaged that P&ID would provide equity in the project in return for the General’s financing. In the end, the project did not go ahead, P&ID was unable to build the envisaged gas processing facilities (a fact confirmed by the Arbitration Tribunal), and General Danjuma’s finance was not required.”
P&ID, in its first reaction to the claim by the Central Bank of Nigeria (CBN) that it had no record of any investment made by the company in the country, said the money invested in the project was provided by General Danjuma.
“Contrary to misinformation emanating from the Nigerian government, specifically the Central Bank Governor, Godwin Emefiele, $40 million was spent on preparatory work in the early days of the project. The $40 million came from General Danjuma and was structured as a contract for services. A complete Basic Engineering Package and Front End Engineering Design were produced at this stage. P&ID was reimbursed for this expenditure.
“P&ID did not claim the $40 million in the arbitration claim, which it brought against the Nigerian government. The $9.6bn tribunal award against Nigeria was for loss of profits, and not the $40 million expenditure,” the company stated.
Debunking the claim that the contract was mired in fraud, P&ID said “Nigeria never made any formal allegations of misconduct during the tribunal or the English Commercial Court’s review. No fraud was alleged because no fraud took place. The opportunity to appeal the tribunal’s judgment has passed and, as such, the window is closed. Only after Nigeria learned they would be held liable for their failure to uphold the P&ID contract has the Nigerian government since mounted an aggressive smear campaign aimed at attempting to exonerate themselves of any responsibilities.”
According to P&ID, the gas plant deal was not doomed from the beginning contrary to the claims of Bloomberg.
“P&ID was established in 2006 for the sole purpose of pursuing the project as outlined in the Gas Supply & Processing Agreement (GSPA). The project’s origins stemmed from the Nigerian government’s Gas Master Plan, and the Accelerated Gas Development plan endorsed by Minister of Petroleum, Rilwanu Lukman – one of the most senior and respected Nigerian government officials of recent decades – who proposed a solution to the country’s dearth of electrical generation that continues to this day.
“P&ID was one of 13 projects to be supported by the government under the Accelerated Gas Development plan. The P&ID project was a key part of this major initiative. The technology for the P&ID project was well established and the wet gas was clearly available – it was (and still is) being flared and wasted, causing massive environmental damage. The tribunal found the project would have succeeded, having heard expert evidence submitted by both P&ID and the Buhari administration.
“Perhaps the ultimate proof that the concept of the project is sound (and not “doomed”) is the fact that the current Buhari administration is trying to copy and paste the very transaction in question! The Nigerian government has recently attempted to engage other companies in negotiations for processing flared gas, using similar technology to the P&ID project proposal. The Buhari administration’s own action to find a way to make use of flared gas is clear evidence that such an approach is both desirable and achievable,” the statement noted.
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