Barely six months after the disbursement of N122 billion to six firms as part of Federal Government’s move to bolster Nigeria’s gas infrastructure, stakeholders have urged the beneficiaries to ensure the fund is judiciously utilised and not diverted to unreasonable projects.
The Guardian findings showed that some of the beneficiaries of the fund are currently engaging in major projects, which are at various stages of completion, but others could not be traced to any substantial project.
Recall that part of the recommendations at the 24th NOG Energy Week Conference and Exhibition was for the Midstream and Downstream Gas Infrastructure Fund (MDGIF) to design initiatives that would catalyse investments in critical infrastructure projects in the midstream and downstream value chain.
And after several months of disbursing fund to six firms by MDGIF, the monitoring and implementation of the projects has been kept away from the public. But stakeholders seek updates the projects.
The beneficiaries are: Asiko Energy Holdings Limited (AEHL); FEMADEC Energy Limited; Ibile Oil and Gas Corporation (IOGC); Nsik Oil and Gas Limited; Rolling Energy Limited and Topline Limited.
When contacted, some of the companies could not provide updates on neither the fund nor the projects, declining to comment, but referred The Guardian to the ministry.
However, findings revealed that Nsik Oil and Gas Limited is implementing a 10 Million Standard Cubic Feet Per Day (MMSCF/D) Compressed Natural Gas (CNG) Mother Station in Isi Edoho, EsitEket Local Council, Akwa Ibom State; Asiko Energy is building a state-of-the-art 5000MT capacity propane terminal in Ijora; while Femadec is planning CNG facilities in six tertiary institutions. Although, the projects’ current stage could not be ascertained as at press time.
The Spokesperson for Minster of Petroleum (Gas), Luis Ibah did not pick his calls nor responded to text message seeking enquiries. However, the Executive Director of MDGIF, Oluwole Adama, recently stated that sustained incentives from the government would be instrumental in fostering a robust environment for private-sector investment in critical infrastructure for CNG, Liquefied Petroleum Gas (LPG), and overall gas sector improvements.
“The injection of funds is only a step; consistent policy support and incentives will pave the way for increased private investment, enhancing our domestic gas value chain and promoting Nigeria’s economic growth,” Adama stated.
The MDGIF boss stated that the Fund is focused on financing projects related to Liquefied Natural Gas (LNG), CNG, LPG processing plants, gas transportation and distribution, bulk storage and terminals, and capturing gas flares in alignment with the federal government’s net-zero carbon commitment.
He noted that the key goal of the Fund is to enhance local utilisation of gas, particularly at the retail level, targeting widespread end users through initiatives like mother-and-daughter stations.
He said the six project promoters met its funding criteria, ensuring that these projects are positioned to boost the domestic gas market and advance our energy transition objectives.
He assured that the disbursed fund would close the infrastructure gap across Nigeria. Adama said: “This investment will be supported by a 1.5% levy on wholesalerpetroleum product prices and is expected to generate income from equity investments made by MDGIF project partners, as well as penalties from gas flaring across oil fields.
“Our primary objective is to ramp up the use of gas through various projects and attract investors by alleviating their burden from commercial bank interest rates.”
He explained that the fund does not initiate projects but promotes existing ones for execution. He identified some of the key projects to include a 5,000 MT butane storage facility, expected to support 13,200 MT of NLNG, set for completion by the end of the year.
According to him, another significant project by one of the beneficiaries is targeting the establishment of 20 mobile CNG refueling stations, which will help reduce dependency on traditional fuels as more partners convert their vehicles to CNG.
An industry expert, Benson Anosike, described the initiative as a welcomed development in the moves to expand the nation’s gas infrastructure. Anosikesuggested that the government should have a structure in place to monitor the implementation of its funds to ensure that its objectives are met. He called on the beneficiaries and the MGD to ensure that the funds are not diverted to irrelevant projects, but spent judiciously to the benefit of the populace.
Chief Executive Officer of Unigas Global Energy Limited, Anthony Agbo said to realize the anticipated progress in the gas sector, the government must prioritise transparency and accountability in managing these investments.
“The Petroleum Industry Act and initiatives like the Nigerian Energy Transition Plan demonstrate the government’s commitment to leveraging gas resources for economic growth. But the successful implementation of major gas infrastructure projects will be crucial in achieving this goal.
“By demonstrating transparency and accountability in the execution of gas infrastructure development projects, government can increase the chances of realising its gas industry development goals and lay the groundwork for future success. Not doing so will mean setting the stage for even greater failure than we are seeing today.
“So, I expect government to truly show that it is moving away from the old ways that has held us down for so long by ensuring that all awarded contracts are implemented according to terms,” he said.
