Stakeholders seek massive investment in gas
Owing to current market opportunities in the natural gas value chain, stakeholders in Nigeria’s hydrocarbon space have stressed the need for massive investments on the commodity.
They also canvassed speedy implementation of existing policies, while pursuing the delivery of identified gas opportunities.This comes at a time when most operators in the gas industry have shelved plans for future investments owing to the non-passage of the Petroleum Industry Bill. But the stakeholders maintained that investment actions in the gas space now, will give an edge to proactive players, who will be the first to benefit when a proper regulatory framework is developed.
The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, at the recently concluded Nigerian Gas Association conference, argued that there had been sufficient discussions on missed opportunities in the past years and huge subsisting potential of gas to the Nigerian economy.
The NCDMB maintained that members of the NGA and other stakeholders of the oil and gas industry must begin to pick up the gauntlet.“I implore you to make this happen. It does not have to be a gigantic, big bang project that overwhelms everybody and does not get delivered at the end of the day. Let’s take one or two aspects of the value chain and channel all energies on them so that in two years’ time we are here to celebrate value addition to our hydrocarbon resources,” Wabote said.
For the NCDMB, implementation of some critical policies aimed at changing the narrative had started, especially with the $200 million Nigerian Content Intervention Fund, managed by the Bank of Industry, for the provision of loans to oil and gas service providers at single digit interest rates for the acquisition of key assets, manufacturing and other activities.
Another ongoing initiative is the Nigerian Oil and Gas Parks Scheme (NOGAPS) currently under construction in Bayelsa and Cross River states.
“The parks will be operated using the sites and service model with provision of electricity round the clock to enhance manufacturing activities,” the NCDMB boss added.
The NCDMB had indicated its willingness to support any investor willing to deepen local content practice in the gas value chain. “If you are interested in manufacturing of cylinders, clips, hoses, burners, regulators, lighters, or in the provision of other services in the gas value chain, please approach the Bank of Industry with your applications. A key requirement is that you must be a contributor to the Nigerian Content Development Fund.”
Similarly, the Group Managing Director, Nestoil, Dr. Ernest Azudialu-Obiejesi, said the sector despite its very well documented potential, is in dire need of innovation from public and private sector players. He said: “Over the years, there have been no shortage of policies from the Federal Government to strengthen the gas sector and make it a major contributor to Nigeria’s Gross Domestic Product growth.
“In fact, this was the thinking behind the Domestic Gas Supply Pricing and Regulatory Policy of 2008. Sadly, the audacious goal of having the gas sector contribute up to 10 per cent to Nigeria’s annual GDP has yet to materialise. Inadequate investment in upstream gas development, pipeline and other related infrastructure has resulted in both inadequate aggregate gas supply and several stranded gas assets across the country.”
The well-intentioned plan to set up Central Processing Facilities (CPF) in three franchise areas, he noted, had also not worked because of the obvious limitations in the commercial arrangements driven by government and International Oil Companies (IOCs).
He added: “Government may need to review the existing CPF franchise arrangement and invite indigenous companies to drive the gas processing infrastructure that will serve as the building block of a re-loaded Nigerian Gas Master Plan (NGMP).”