$9b Judgment: P&ID Chief Names Yar’adua, Lukman, NNPC GMD, 15 Others Behind Contract


The late President Umaru Yar’Adua

Ex-President Goodluck Jonathan

The late former Minister of Petroleum Resources, Dr. Rilwan Lukman

Ex-Minister of State for Energy (Gas), Mr. Olatunde Odusina

Ex-Minister of Petroleum Resources, Mrs. Alison Madueke

Ex-Special Adviser to President on Petroleum Matters, Dr. Emmanuel Egbogah

Ex-GMD of NNPC, Shehu Ladan

NNPC GMDs in 2011 and 2012



Addax Petroleum

Neil Hitchcock

Engineer Goni Sheikh,(then Permanent Secretary, Ministry of Petroleum Resources)

Mrs. Grace Taiga, the Legal Director of the Ministry

Dr. Ibrahim, Ministry’s Head of Policy

Dr. Ogwu Jones (Department of Petroleum Resources)

Mr. Taofiq Tijani, who was at this stage the Technical Assistant to the Minister, Engineer Ikejiani, the Special Technical Adviser to the Minister,

Dr. Labi Ajibade, the Manager of Gas of NAPIMS,

Dry David Ige, the Group General Manager/Special Technical Adviser to NNPC (General Executive Director, Power and Gas, NNPC)

Mr. Sunday Babalola of the DPR,

Mrs. Uno Adeniji, the General Manager of Planning, Gas and Petroleum of NNPC,

Mr. Umar, Manager Gas and Petroleum, NNPC,

Mr. Nuhu Tizhe, the Technical Adviser to the Group Managing Director of NNPC,

Mrs. Belgore, the Assistant Legal Adviser to the Minister,

Mr. Debo Spaine of Addax.

Mohammed Kuchazi (P&ID)

The controversy over $9.6billion judgment debt against Nigeria deepened on Saturday following a revelation that the list of those involved in the negotiation of the contract was submitted to an Arbitration Tribunal in London

The founder of Process and Industrial Developments (P&ID), Michael Quinn admitted to have had audience with the late President Umaru Yar’Adua, ex-Minister of Petroleum Resources, Dr. Rilwanu Lukman, a former Group Managing Director of the Nigerian National Petroleum Corporation, Shehu Ladan and 15 others over the Gas Supply and Processing Agreement (GSPA).

He also said he wrote to ex-President Goodluck Jonathan, a former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke and a former Special Adviser to President on Petroleum Matters, Dr. Emmanuel Egbogah on certain developments on the failed project.

Besides, he admitted that the Arbitration, which led to the $9.6billion judgment debt, was entered into by the Jonathan administration with the knowledge of Diezani.

But his revelation does not mean that those mentioned were involved in any wrong doing in the deal.
Quinn said that on 19 September 2012 he wrote to the Minister for Petroleum Resources nominating P&ID’s choice of Arbitrator, the Sir Anthony Evans.

He said that on 30 November 2012 the Government wrote to inform P&ID of the appointment of Chief Bayo Ojo as the Government’s arbitrator.

He spoke of a meeting earlier on 12 October 2012 at the “office of the Government’, but would not want to divulge what transpired.

He listed the key actors/ players in the contract in his witness statement tabled before the Arbitration Tribunal.

He said the signing of a Memorandum of Understanding for the project was done on July 22, 2009.

Although the document was filed at the tribunal in 2014, it was learnt that it is part of the ongoing investigation by the Office of the Inspector-General of Police, the Economic and Financial Crimes Commission (EFCC) and the National Intelligence Agency (NIA).

The three institutions were mandated by President Muhammadu Buhari to look into the “criminal conspiracy” behind the award of the $9.6billion judgment.

The witness statement of Quinn reads in part:
“I am fully authorized to make this statement in support of P&ID’s claims in the arbitration commenced against the Government. I make this statement on the basis of my own knowledge of the events I describe, whether that be from my direct participation in them or from discussing them contemporaneously with my colleagues, and in particular Neil Hitchcock, the Project Director of P&ID, and my business partner Brendan Cahill.

“The GSPA represented a substantial infrastructure project involving anticipated profits of $5 to $6 billion for P&ID over a 20 year period. It was the culmination of years of research by my team of engineers into the production of clean energy from natural gas.

“I believe that it was also a ground-breaking venture of great significance to the Nigerian economy which would have benefited millions of ordinary Nigerians by boosting the domestic electricity supply by the productive utilization of existing natural gas reserves. Had the GSPA been implemented in accordance with its terms the national power output would have increased by over 2,000 MW.

“To place this increase in context, to my knowledge the highest peak power output ever recorded in Nigeria was 4,349.7 MW, on 17 December 2012.

“The GSPA would also have been the high point of my own career in Nigerian business which spans in excess of 30 years and encompasses dozens of large scale projects ?
“In this witness statement I wish to explain how the GSPA came about, and why P&ID was ultimately prevented from implementing it.

“It was against this background, in 2006, that P&ID and P&ID Nigeria were incorporated and that we started to work in earnest on a gas project (“the Project”).

“We set about the necessary preparatory engineering work required to construct a gas stripping plant capable of processing 400 MMSCuFD4 of Wet Gas and a polymer grade propylene plant capable of producing 250,000 metric tons per annum of polymer grade propylene.

“The idea was that we would obtain Wet Gas and process it to remove the NGLs (principally propane and butane).

“The propane would be used as feedstock for the polymer grade polypropylene plant, and the remaining NGLs could be sold, either domestically or on international markets. The Lean Gas could be sold for domestic power generation.”

Quinn explained how and why he met the late President Umaru Yar’Adua and other key actors.
He said: “When we first started to work on the Project, we had envisaged that we might build the Gas Processing Facilities in the Lagos area. There are a number of natural gas fields off the coast of Nigeria in the area adjacent to Lagos, which could easily have supplied more than enough Wet Gas for the Project.
“As in the case of the Lagos area, there were numerous natural gas fields off the coast of Calabar, such as those contained in concessions, OML (meaning “Oil Mining Licence”) 123 and OML 67. OML 123 is operated by Addax Petroleum and OML 67 is operated by Exxon Mobil.

“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.

“I first broached the Project with the then Permanent Secretary to Government at the State House. He was very impressed by the Project and suggested we should put forward a proposal to the President in his capacity as Minister of Petroleum Resources. The Permanent Secretary also proposed that I should seek a meeting with the President.

“At the time of our proposal the Special Adviser to the President on Energy and Strategic Matters was Dr. Rilwanu Lukman. I also approached Dr. Lukman and discussed the project with him. He was very supportive of the Project and endorsed our decision to put the project to the President.

“Thus on 7 August 2008 P&ID wrote to the late President Yar’Adua with a formal proposal for the Project to be implemented.

“I was subsequently invited to meet the President. At our meeting I explained the problems and the proposed solution presented by the Project. The President was favourably disposed towards the Project. As a result it was arranged a presentation would be made to the Minister of State at the Ministry of Petroleum Resources, who was the President’s No 2 in the Ministry. We made the presentation to Mr. Odusina and the Ministry, as directed, in October 2008.

The Special Adviser, Dr. Lukman, was aware of the oil and gas sector construction expertise of the principals of P&ID, due to our leading role in the Butanization Project, some 15 years previously, which is referred to at paragraph 13 above.

“As a result of Dr. Lukman’s prior experience of me and my engineers during the Butanization Project, I believe that he, and therefore the Government, were confident in our abilities to undertake and complete complex Natural Gas-related projects.

“On 18 December 2008 Dr. Lukman was for the second time appointed the Honourable Minister of Petroleum Resources. In early 2009 the Minister directed that P&ID’s proposal be further examined by the Government, and we were requested by Engineer Taofiq Tijani, the Special Technical Adviser to the Minister, to bring the proposal to the office of the Honourable Minister for Petroleum Resources (see letter from Engineer Tijani at pages 70 to 71 of MQ1). ?
“We made several further presentations. A copy of the presentation, as forwarded to the Minister, Dr. Lukman, by letter dated 24 February 2009.

“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.

“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.

The reason for the 2 phases set out in the Proposal was to ensure the earliest possible date for the commencement of delivery to the Government of Lean Gas.”

The P&ID founder also claimed that a Technical Working Committee was raised by the Ministry of Petroleum Resources and his company worked with them.

He added: “On 31 March 2009 we were invited for discussions with the technical working team to the Ministry (“the Technical Working Team”). The Technical Working Team set about a review of P&ID’s proposal.

“During the review P&ID was required to attend meetings with the Technical Working Team. For instance, P&ID was invited to a meeting on 1 April 2009 (page 95 of MQ1) and a further meeting on 9 June 2009 (page 96 of MQ1). The Technical Working Team was interested, in particular, to learn about P&ID’s accumulated knowledge of the precise engineering and technical requirements of the various technologies and engineering solutions required to implement the Project. P&ID had already examined, and satisfied itself as to, the feasibility of the Project, and was therefore well advanced in its thinking and detailed engineering development.

“I wrote to Dr. Ibrahim, the Ministry’s Head of Policy, on 11 June 2009 about this and other matters arising from the meetings with the Technical Working Team. It was agreed that the Project would be limited, for the time being, to the construction of a gas stripping plant. It was felt that this would expedite the Project, thereby leading to the earliest supply to Government of Lean Gas.

“We also discussed with the Technical Working Team the concept of 2 separate production trains. As I stated in my letter of 11 June 2009 (pages 97 to 98 of MQ1), this had been provided for in the engineering designs for the Project in order to achieve “time of the essence” implementation. It was perceived also that this would ensure continued supply of Lean Gas to the Government if 1 of the 2 trains was for any reason put out of action for a period of time.

The use of 2 process trains also enabled the delivery of Wet Gas by the Government to be staggered into 2 phases. It was envisaged at this time that each phase would comprise about 180-200 MMSCuFD although in the event the GSPA provided that Phase 1 was 150 MMSCuFD and Phase 2 was 250 MMSCuFD.

“There were discussions about the possible locations from which to source Wet Gas for the Project. On 15 June I wrote to the Honourable Minister to explain the potential benefits of using, for Phase 1, the 180-200 MMSCuFD of Wet Gas which was at that time being flared by Addax Petroleum off the coast of the Calabar in a concession known as OML 123.”

He said the collaboration with the Technical Team led to the signing of a Memorandum of Understanding on July 22, 2009.

He said: “The outcome of the review by the Technical Working Team was positive, and on 22 July 2009 a Memorandum of Understanding (“MOU”) was executed by the Minister, Dr. Lukman, and P&ID (pages 100 to 110 of MQ1).

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