A leader in the main militant group on Nigeria's Bonny Island said Friday it was ready to disarm, potentially leading to improved security conditions for a planned U.S. gas export scheme.

In a phone interview with Dow Jones late Friday, Papi, a leader in the Okoloma Ikpangi group said: "We are accepting the amnesty" offered by the government last month to Niger Delta militants. "We are ready" to disarm, he said.

However, he added the group, the name of which means "the Bonny Kingdom Faction" in the local language, is "trying to reach the amnesty committee." "We don't know the conditions" to disarm such as where to lay down the weapons, he said. "There should be payment for our arms," Papi said, adding "we need rehabilitation for our youth."

Papi - a pseudonym - said the group, which has 180 fighters based in a camp close to the Cawthorne Channel 1 area, was involved in gun battles with the army last year.

Bonny Island houses a 400,000 barrels-a-day oil export terminal and the Nigerian Liquefied Natural Gas Ltd. plant, Africa's largest liquefied gas facility. Both are owned by Royal Dutch Shell PLC (RDSB.LN), Total SA (TOT), ENI SpA (E) and the Nigerian National Petroleum Corp. Plans to adds a new facility for U.S. gas exports, Train 7, have yet to get a final greenlight despite signed LNG sales contracts with the likes of BG Group PLC (BG.LN) as security among other issues still has to be considered.

Papi said that lack of water, schooling and health care - common grievances in the oil-rich Niger Delta - have to be addressed. But he emphasized as a priority the need to give access to LNG-related contracts to a broader spectrum of locals. If those problems - in particular local youth employment - are resolved, "Train 7...nobody can stop them, there will no problem," the militant said. "Companies should help the youth before Train 7 kicks off. That's all we need," Papi added.

The militant's statements are a stark reminder, however, of the depth of the problems that led to mounting insecurity in the region, culminating with the shutdown of 1 million barrels a day of oil output - equivalent to over 1% of the crude consumed daily worldwide.

Localized conflicts in the Delta have becoming increasingly militarized with many locals become more conversant in military vernacular than in oil-field terminology. Papi said his group is equipped with "RPG (rocket-propelled grenade) launchers, GPMGs (general purpose machine guns), AK-47s (assault rifles)." He said his fighters had first used weapons "to protect our boundary" from neighboring communities. Disputes over who controls specific land in oil-bearing oil communities is common in the Delta. But he said the militancy also stemmed from local political disagreements and a social divide within Bonny Island where he said many locals do not benefit from LNG projects' jobs.

"This is the original reason for coming in the creeks: The rich get richer and the poor get poorer," he said.

"The big men in Bonny collect contracts from the whites," he alleged.

"We can't seek job without paying black contractors, indigenous contractors," he added.

Spokesmen for NLNG didn't return calls or e-mails. But Papi said he and his men now regretted embracing armed tactics. "We wrote an apology to the local government, to the community for using arms," he said.

- By Benoit Faucon, Dow Jones Newswires; +44 77 601 777 36