The Na­tion­al Gas Com­pa­ny (NGC) has or­dered Phoenix Park Gas Proces­sors Lim­it­ed (PPG­PL) not to pur­sue any new projects in Africa un­til it com­pletes a com­pre­hen­sive risk as­sess­ment of all the African coun­tries it is in­ter­est­ed in do­ing busi­ness with.

Well-placed sources at NGC and the Min­istry of En­er­gy told the Busi­ness Guardian that the in­struc­tion was hand­ed down af­ter a de­ci­sion not to pur­sue a US$100 mil­lion gas pro­cess­ing fa­cil­i­ty in the Niger­ian State of Imo which would have seen PPG­PL con­struct­ing a fa­cil­i­ty sim­i­lar to its op­er­a­tions in Trinidad.

The project was turned down late last year when the com­pa­ny's new Pres­i­dent In­dar Ma­haraj took of­fice. The Busi­ness Guardian has learnt that one of the first things Ma­haraj did was re­view all the projects that the com­pa­ny was pur­su­ing un­der the for­mer Pres­i­dent An­drew McIn­tosh.

The com­pa­ny was asked if the project was aban­doned af­ter Ma­haraj be­came Pres­i­dent but it re­fused to re­spond to the ques­tion.

Sources say the Ow­el Linkso as it was called would have seen in­vestors from Nige­ria part­ner­ing with PPG­PL in build­ing the fa­cil­i­ty and ac­cord­ing to pro­jec­tions could have been a ma­jor com­mer­cial suc­cess for the NGC/PPG­PL. But af­ter months of pur­su­ing the projects and hav­ing re­ceived ap­provals from au­thor­i­ties in Nige­ria as well as the bless­ings of the el­ders of the tribes, the NGC, which owns 51 per­cent of PPG­PL, turned down the project say­ing Nige­ria's coun­try risk was too high.

Why did we waste our time and spend all that mon­ey and then we de­cid­ed that the coun­try risk was too high? Sure­ly this had less to do with busi­ness and more to do with pol­i­tics," a source at the NGC told the BG.

Ques­tioned on why NGC did not pur­sue the project, the state-owned com­pa­ny re­spond­ed by e-mail, stat­ing: "De­ci­sions to pur­sue or not pur­sue projects are based on a num­ber of fac­tors. ALL projects (lo­cal and in­ter­na­tion­al) are as­sessed through the lens of risks, eco­nom­ic re­turns, tech­ni­cal fea­si­bil­i­ty, ca­pac­i­ty, etc, and de­ci­sions are based on thor­ough con­sid­er­a­tion of all these fac­tors.

"In projects of this na­ture, the fi­nan­cial ca­pac­i­ty of the par­ties in­volved, their abil­i­ty to part­ner eq­ui­tably and the eco­nom­ic mod­el pro­posed are key el­e­ments for dis­cus­sion, re­search and de­ci­sion mak­ing. One should ap­pre­ci­ate that ex­tra care be tak­en when per­form­ing in the in­ter­na­tion­al mar­ket. In ad­di­tion, and equal­ly im­por­tant, is our rep­u­ta­tion as a State or­ga­ni­za­tion, which should al­ways be treat­ed with the high­est re­gard and well pro­tect­ed."

Asked if Nige­ria was specif­i­cal­ly con­sid­ered too much of a risk for the NGC to do busi­ness in, the com­pa­ny wrote: "No. Nige­ria is not con­sid­ered too much of a risk for NGC. As the Min­is­ter of En­er­gy and En­er­gy Af­fairs con­firmed at the re­cent En­er­gy Con­fer­ence in Port of Spain: "NGC . . . is al­so ex­am­in­ing in­vest­ment op­por­tu­ni­ties in Africa." In this re­gard, we are cur­rent­ly ac­tive­ly in­volved in dis­cus­sions with African stake­hold­ers."

The com­pa­ny was asked if it had in­struct­ed PPG­PL to con­duct­ed a risk as­sess­ment of all the African coun­tries and it re­spond­ed by say­ing, "The NGC, in line with good cor­po­rate gov­er­nance, al­ways as­sess­es busi­ness op­por­tu­ni­ties, (lo­cal and in­ter­na­tion­al), us­ing a sol­id due dili­gence mod­el. The Com­pa­ny's de­ci­sion to in­vest in­cludes, but is not lim­it­ed to, an in-depth eval­u­a­tion of the risks, the re­wards and the track record of the per­sons in­volved in and/or lead­ing the busi­ness propo­si­tion."

PPG­PL–which has two mi­nor­i­ty US part­ners, Cono­coPhillips and Pan West En­gi­neers–is one of the largest gas pro­cess­ing fa­cil­i­ties in the Amer­i­c­as. It process­es raw, nat­ur­al gas de­liv­ered to its fa­cil­i­ty from the up­stream pro­duc­ers and ex­tracts nat­ur­al gas liq­uids (NGLs). The processed nat­ur­al gas is then de­liv­ered to down­stream fa­cil­i­ties, that use it as a fu­el and feed­stock to op­er­ate at op­ti­mal ef­fi­cien­cies. PPG­PL al­so frac­tion­ates the ex­tract­ed NGLs in­to three com­po­nents: propane, bu­tane and nat­ur­al gaso­line. The propane and bu­tane are mar­ket­ed in the Caribbean and Cen­tral Amer­i­ca and the nat­ur­al gaso­line is mar­ket­ed in­ter­na­tion­al­ly.

Sources say the plan in Africa is to iden­ti­fy places with re­sources but which lack the tech­ni­cal and in­sti­tu­tion­al ca­pac­i­ty to de­vel­op those re­sources. Africa is seen as the nat­ur­al fit and hence the con­cen­tra­tion on that con­ti­nent. In fact on­ly two weeks ago PPG­PL host­ed a del­e­ga­tion from Kenya and in De­cem­ber one from Tan­za­nia. How­ev­er NGC sources raise con­cern that with the de­ci­sion to do risk as­sess­ment of all the coun­tries be­fore any in­di­vid­ual project is pur­sued the com­pa­ny is run­ning a risk of miss­ing out on op­por­tu­ni­ties.

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