‘New pricing framework ready for gas development’

…LPG penetration crosses one million tonnes

The Committee on National Gas Expansion Programme (NGEP) has stated that a new gas pricing framework that would drive gas development and guide operations in the nation’s gas sector is ready and would be unveiled in the coming days.

According to the Chairman, National Gas Expansion Programme, (NGEP), Mohammed Ibrahim, the new gas pricing framework would attract both local and foreign direct investment while also unlocking new frontiers through a combination of technology and policies aimed at addressing issues that impede growth of the sector.

Ibrahim, who was represented by the Assistant Secretary of the Committee, Olasupo Agbaje at the 12th International conference and awards organised by the Nigeria Gas Association (NGA), said: “We are looking at issues that impede the growth of this sector, one of which is pricing and we are taking necessary efforts to address them.”

He stated that domestic LPG penetration in Nigeria hit over one million metric tonnes in 2020 with a target to take Nigeria to two million metric tonnes in 2021.

“From what we have seen so far this year, we believe it is achievable; however, there are lots of intervention mechanisms that are going to evolve in 2021. We are going to have our micro distribution centres and we are also working on a cylinder penetration programme that will be a massive initiative in that regard.

“We have a government that is committed to the development of gas and has identified that gas is obviously the way to go. So, for us, what should occupy the front burner over the next decade is domestic gas development. We need to enhance local production and that is why we have so many gas investments coming up so that we can enhance our local production. We are talking to key stakeholders on the need to create an enabling environment for local consumption to substitute export”, he added.

He added that the NGEP is committed to ensuring that over the next ten years, 40 per cent of consumption of petrol and diesel would shift over to gas products for auto transportation.

Also speaking, the Managing Director, Shell Nigeria Gas Limited, Ed Ubong, stated that to unlock new frontiers or new markets, there is need to identify demands, calling on the need for infrastructure to be in place to drive the development of gas in the country.

“If West Africa is going to expand, we need to have the right fiscal environment that will bring gas to the surface; the right fiscals that will give investors the confidence to invest their money to build infrastructure and we also need to provide security because the Gulf of Guinea is known as one of the most dangerous seaways in the world. These are some of the challenges that we face and Nigeria must develop and sustain its gas development programmes,” he said.

The Managing Director, Nigeria Ports Authority (NPA), Hadiza Bala Usman, represented by the Executive Director, Marine and Operations, Onari Brown, said the theme of the event tagged “Unlocking new frontiers for gas markets in West Africa speaks to the pressing need to convert the nation’s rich natural endowments into potentials that would enrich the nation’s wealth.

She said the NPA would support policies and actions aimed at optimizing the advantages that the endowment of over a 100 trillion cubic feet of natural gas can bring to the Nigerian economy.

“Nigeria can only reap the greatest benefit of its gas endowment through international trade and it is for this reason that we are deliberate about aligning the ongoing reform initiative around our port operations

The Managing Director, West Africa Gas Pipeline Company (WAGPCO), Gregory Germani, said Nigeria has seen a new pivot in the new decade for gas, stating that another key change has been a strengthened supply from Nigeria across 2019 and 2020 courtesy of the outstanding work of its key partners Nigeria Gas Company (NGC).

“We are hoping to see the expansion of gas use by industrial customers and in the region. We are in talks with our partners to increase the supply of gas to the system, improving the efficiency, the reliability to meet customer needs,” he said.