Nigeria Needs Significant Investments To unleash Gas potential – DPR | Independent Newspapers Limited
Newsletter subscribe

Oil & Gas

Nigeria Needs Significant Investments To unleash Gas potential – DPR

Posted: Aug 24, 2016 at 9:44 am   /   by   /   comments (1)

Charles Okonji

The Deputy Director, Gas Monitoring and Regulation Division of the Department of Petroleum Resources (DPR), the Nigerian oil and gas regulatory agency, Mr. Antigha Ekaluo, has said that the country would require significant investments in the midstream and downstream sectors of the petroleum industry in order to unleash the immense gas potential in Nigeria.

Ekaluo, who explained some of the challenges in developing Nigeria’s gas pipeline network, the impact of natural gas pricing on gas development, the factors preventing adequate gas supply for power generation and the issue of gas flaring in the country, said that Nigeria was yet to its optimum level in gas development.

He said: “We are still developing as a nation. Although Nigeria is blessed with abundant gas resources, with proven gas reserves at a significant 188 trillion cubic feet [5.32 trillion cubic meter] as of January 1, 2015, the state of gas development, supply and utilisation in Nigeria still requires more attention for improvements.”

According to him, of the average daily production of 8.25 billion cubic feet [234 million cubic meter] per day, about 40 per cent had been for the export market and 11 per cent being flared, while a paltry 16 per cent being supplied to the domestic market and the balance used up in the course of oil and gas production.

Ekaluo stated: “The major gas suppliers are the export-oriented international oil and gas companies that supply Nigerian LNG. We are also beginning to see growing indigenous suppliers who are pushing volumes into the domestic market. The likes of NPDC, Seplat and Seven Energy are notable examples in this respect.

“We face a lot of challenges, but we are on top of the situation with a view to providing the needed solutions. From the perspective of the regulator, we know that the dearth of infrastructure and funding constraints for gas projects are the key challenges facing us as a nation.

“Of course, significant investments are required in the midstream and downstream sectors to unleash the immense potential of gas in Nigeria. This includes investments in pipelines, central processing facilities and gas-based industries, which use this gas as either fuel or feedstock down the value chain where offtakers such as independent power plants also operate,” he stressed.

He said that the changes to the legal framework would improve the gas transportation network, pointing out that the structural and fiscal reforms for gas investments were also necessary for the growth of the gas sector.

He added that the upcoming review of the National Gas Policy would bring about structural and fiscal reforms that would address the challenges associated with Nigeria’s gas development, stressing that the Nigerian Gas Transportation Network Code [NGTNC] being championed by the DPR in conjunction with the NNPC, would be a game changer, as it would provide the platform on which a competitive Nigerian gas industry would evolve.

Ekaluo said: “The network code will provide the enabling environment for gas transportation services to meet market requirements on a non-discriminatory basis, with common sets of rules to ensure open access and fair competition. In fact, we have come up with the modalities for its implementation, and we have also laid down what the structure of the NGTNC should be.

“Ideally, the gas pricing regime should be driven on a willing seller, willing buyer basis as in other, fully developed gas markets. However, we have yet to attain that status. For national strategic reasons, the government is implementing a transitional pricing regime for gas.

“The government is maintaining floor prices for the three gas subsectors as follows: gas to power (USD 2.50 per 1,000 cubic feet [USD 0.09 per cubic metre]), gas-based industries (USD 0.90-3.00 per 1,000 cubic feet [USD 0.03-0.11 per cubic metre]); and then the prices for the commercial offtakers are negotiated with their suppliers.

“The overall intent here is to achieve minimum base stock gas volumes in the domestic market to trigger the willing buyer, willing seller scenario that will hopefully incentivise both the suppliers and off-takers alike,” he stressed.

Charles Okonji

Tel: +2349085930630


Comments (1)

  • Aug 24, 2016 at 1:14 pm JohnSuzzanscott

    i was suffering from HIV/AIDS disease for the past 6 years ago and ever since i have been passing through serious agony in my life,i contact this infection through my boyfriend and i have done series of tests and taking drugs to be cure but unfortunate for me i still carry this deadly infection inside of me,i will love to say i was so lucky to have came across DR IGABA several testimony online people testifying series of how they were totally cure of HIV/AIDS through his herbal medicine on his email: i contacted his email and explain my situation to him and he accepted to help me cure my HIV/AIDS disease,i followed his instruction and indeed he prepare a herbal medicine for me and after i receive the herbal medicine he told me how to apply the herbal medicine and after 2 weeks of usage i did the test again and i was confirmed negative.

Comments are closed.