By Adewale Sanyaolu
The looming danger threatening to throw the entire country into darkness due to lack of gas supply which has left many of the country’s power plants comatose may seem to be over as stakeholders across the gas value chain have expressed optimism in the new Draft National Gas Policy released to over 1,000 stakeholders by the Ministry of Petroleum Resources, last week.
For several years, gas-to-power constraints have been a major hurdle for gas producers, industries, homes and power generation firms due to constant attacks on gas infrastructure assets by Niger Delta agitators and gas pricing disagreements.
However, hope seems to be in the horizon, when last week, in Abuja, the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, announced the release of the gas policy document to stakeholders at the recently concluded Nigerian Gas Association (NGA) 10th International Conference and Exhibition, bringing an end to the several years of absence of a clear cut policy for the gas sector.
Components of the new draft policy
According to Kachikwu, the draft gas policy promotes a competitive business environment for both current and new investors, articulates vision for the sector and sets policy goals, strategies and an implementation plan for the medium to long term targets for gas market development.
He explained that most of the investment required in the sector will be drawn from the private sector, adding that the government will set the environment and support investors with appropriate interventions to bring their projects to fruition.
‘‘Hence, our policy challenge is to develop a policy, institutional, legal, regulatory and fiscal framework that is attractive to the private sector.
On institutional framework, he said reforms capable of translating aspirations into results will commence with the strengthening of the policy making and surveillance capability of the Ministry of Petroleum Resources by introducing new technical resources, restructuring of existing departments, and assignment of additional mandates.
‘‘These reforms are clearly articulated in the proposed National Gas Policy, and will be further clarified by legislation.
The attainment of these projects will not only broaden the economy; related industries will grow out of these projects, such that jobs and other multiplier benefits will follow. This is the direction we must follow,’’ he said.
Constraints in the gas value chain
President of NGA/Managing Director and Chief Executive Officer (CEO) Oando Gas and Power, Mr. Bolaji Osunsanya, disclosed that Nigeria’s current gas production can deliver 32GW if fully deployed for power, adding that in this scenario, we would still be behind India, South Africa and many other developing economies in making sizeable quantities of gas available for domestic electricity consumption.
He maintained that gas fuelled generation accounts for only about 2.5GW of current generation, stressing that due to poor planning, a further 2GW of generating plants are stranded with no gas supply. This, he said would seem to underscore the size of the opportunity that exists to fill this obvious gap.
‘‘Gas supply has been highlighted as the weak link in the development of the power sector. While we would not debate how we got here, we will rise up to the challenge of ensuring that gas is made readily available for the development of the electricity supply industry.
It is clear that with a focused development, domestic gas can be harnessed to fuel the entire power demands of the country and beyond,’’ he said
He maintained that any discussion on gas supply would be incomplete without talking about the delivery infrastructure; the gathering systems, the processing infrastructure and the distribution pipelines.
Managing Director, Chevron Nigeria Limited, Mr.Cley Neff worried that Since 2010, the funding level for NNPC’s share has not been sufficient to fully implement Joint Venture business plans
He noted that the persistent shortfall in funding constrains growth as a significant number of viable projects cannot progress
On his part, Managing Director Shell Petroleum Development Company (SPDC) /Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, said there are many challenges to overcome, including funding of upstream gas development and the payment of huge outstanding debt when government revenues are stretched.
How power sector I’ll benefit
Group Managing Director, Nigerian National Petroleum Corporation (NNPC),Mr.Maikanti Baru, said at the NGA conference that the oil and gas sector has about $51 billion investment opportunities in the midstream and downstream gas sector.
Out of the potential $51 for the entire gas sector, Baru posited that about $35.4 billion investment will be required in power plants projects, gas exploration and others.
On the other hand, Kachikwu said that the priority of the Government is the utilisation of natural gas for domestic needs with the power sector as the priority end-use sector.
What should be done
Osunsanya advised that the issues bedevilling the power sector must be addressed at the same time.
According to him, the cash collections in the system must be adequate to support any development in the sector including gas development and supply, power generation, transmission and distribution.
On the other hand, the regulators and other government agencies, such as the Bulk Trader and the Ministries of Finance, Power and Petroleum, must come to a common understanding of the imperatives of the sector so that we begin to solve the problem.
He added that it is critical that the country develops a robust gas infrastructure network to support this objective because the country’s 2,500km of domestic gas supply pipelines seems pale when compared to a need of about 12,000km.
Neff suggested that to ensure on-schedule completion of projects, once multi-year projects are approved, annual budget provisions should take full account of funding needs over the project life.
He canvassed for the implementation of the Gas Supply Aggregation Agreements contract Regime while transition to a willing buyer / willing seller gas market should be encouraged alongside a power tariff that provides a commercial return.
Okunbor said with diversification now a key focus for Nigeria, time is very ripe for the country to develop a proper gas economy that impacts almost every sector of the nation’s economy.
‘‘We need to extend the frontier for gas. Government’s role should go beyond providing backbone infrastructure to providing institutional and legal framework that will enable domestic gas supply to create multiplier effects on the economy through the power and industrial sectors,’’ he canvassed.
CSR: NLNG invests N200m on 10 Nigerian postgraduate scholars
THE Nigerian Liquefied Natural Gas (NLNG) Nigeria LNG Limited says it has invested N200m on the sponsorship of 10 Nigerians, to pursue various postgraduate courses abroad as part of its Corporate Social Responsibility (CSR).
The 2016 award is to cover tuition, living expenses accommodation and travels for the beneficiaries.
Among the latest set of 10 beneficiaries is a visually impaired female Law Graduate from Bonny Island, NLNG’s primary host community.
A statement by the General Manager, External Relations, NLNG, Kudo Eresia-Eke, stated that, so far the firm has awarded a total of three thousand and fifty-three (3,053) scholarships to Nigerian students.
‘‘This is part of the company’s education intervention programme for deserving students at Post Primary, Undergraduate and Post Graduate levels of education.
This batch of the Post Graduate Scholar- ships beneficiaries brings to 48, the total number of such awards since the commencement of the scheme in 2013. The beneficiaries from all over the country, who emerged via a rigorous qualification exercise involving more than 2,000 applicants, shall be pursuing further education in specialty areas in top universities in the United Kingdom,’’ the statement said.
Speaking at the occasion, Eresia-Eke said, the goal of the Nigeria LNG Post Graduate Scholarship Scheme is to provide support for the development of competent professionals who will bridge the specialists’ manpower gap in the country, especially in high profile fields of Engineering, Geosciences, Environmental Studies, Management Sciences, Information Technology, Law and Medicine at Masters Level only.
According to him, the overseas scholarship scheme is another effort by Nigeria LNG Limited to consolidate on its human capital development aspirations, in a bid to trigger the necessary indices required for the growth of Nigeria’s economy besides the current state of dependence on oil and gas.
“When most companies are winding down their operations and reducing production costs; including laying off workers and abandoning all Corporate Social Responsibility initiatives in order to survive the recession, NLNG is still keeping faith with its programmes, particularly, the aspect that touch on human capital development”, he added.