Virtual pipelines to solve infrastructural challenges in gas sector, says Joe-Ezigbo
The Co-Founder/Executive Director, Falcon Corporation Limited, and first Vice President, Nigerian Gas Association (NGA), Audrey Joe-Ezigbo, has prescribed virtual pipelines as one of the available solutions to resolving infrastructural challenges in the nation’s gas industry.
Audrey, in an interview with The Guardian recently, believed that virtual pipeline would facilitate the delivering of gas to remotely located industries or plants.
According to her, due to the high cost of acquiring the assets, it is thus better suited to bulk off-takers, such as power plants and heavy industrial consumers, or in cases where there are industrial clusters that can absorb shared portions of the fixed costs.
She explained: “Virtual pipeline technology is however expensive from the point of view of the equipment itself, and then also the added costs of compression and/or regasification as in the case of mini-Liquefied Natural Gas, security, logistics and so on. In many instances there are limitations as to where and how efficiently you can deploy this technology and remain cost effective, particularly considering the state of our current road network and building patterns, and other challenges we face in the environment. It is an alternative yes, and it is commendable to see those investors who are making the first moves to deploy virtual technology to address the industry gaps.”
Joe-Ezigbo decried the harsh operating environment in the nation’s gas sector occasioned by the high exchange rate, which she said had caused liquidity crunch in the sector.
She said: “We cannot reasonably expect gas producers and suppliers to continue to operate where they are owed several billions of naira, with over two years’ worth of unpaid invoices accumulated.
She noted that many players are facing bankruptcy arising from inability to service their loans, and a severe liquidity crunch that impacts their day-to-day operations.
Speaking to the currency mismatch between investments and returns, Joe-Ezigbo pointed out that the Government had recently mandated that gas producers be paid in naira, whereas gas is a dollar-denominated commodity, and loans for gas development and infrastructure projects are contracted in dollars, and expected to be repaid in dollars.
Concerning Falcon’s operations, she disclosed that Falcon operates the Ikorodu Franchise for the Nigerian Gas Marketing Company, and had several kilometers of natural gas pipelines traversing the Ikorodu area.
She said the company found it imperative to engage the various stakeholders to work collaboratively and in unison, to ensure safety remained the highest priority for continuous sustainable growth and development.
“We have observed companies building infrastructure, carrying out excavations and installations and others without taking into cognisance the risk implications that can possibly cause colossal loss of lives and properties to our host communities, and understand that this challenge is enabled largely by two factors. These are the existing multiplicity of government agencies, which means that in many cases, permits are given for such works to be done without companies being informed of our existing Gas infrastructure within the area; and secondly, the lack of composite data and mapping of the existing underground infrastructure within the area.
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Kacalla Baru, said that the Federal Government has mandated the Corporation to pursue an aggressive gas development programme to stimulate economic growth in the Country.