‘only a well structured gas policy can drive desired investment’ – businessday _ news you can trust businessday _ news you can trust

Plans by the Federal Government to deepen the prospect of gas to attract the desired investment to grow the economy and strengthen the energy sector may never see the light of day unless there is a radical rethink of gas policy, industry experts say.

Industry watchers observe that Nigeria with 188 trillion cubic feet gas reserves has over the years struggled to develop its domestic gas market and to maintain its position as a major player in the global gas business owing to an abnormal gas policy that frustrates investors’ efforts.

From all indications, the gas sector in Nigeria holds out significant economic potential, as the Federal Government through the Ministry of Petroleum Resources says it plans to enhance gas and other derivatives to ensure they attract forex rather than continue with a situation where oil is the main source of forex accruals.

Industry watchers are however concerned that the inadequacy of the existing gas processing, transmission and distribution infrastructure to support the current demand may slow that process of growth. Grade 9 electricity review To this end, the managers of the economy must as a matter of urgency streamline the adoption of a national Gas Infrastructure Blueprint that seeks to address the need for rapid deployment of gas infrastructure across the country.

Dada Thomas, managing director, Frontier Oil Limited, observes that the pricing structure and the nature of contracts remain a significant obstacle to the development of natural gas in Nigeria, saying there is a need for a standardisation and harmonisation of the agreements.

Thomas opines that the only incentive for indigenous companies willing to continue to invest in gas for domestic use is if government provides an enabling environment.

He argues that the absence of incentives to encourage investment in key infrastructure to boost local production and sales of the product to consumers must occupy a pride of place in government priority list.

Gbite Adeniji, an energy expert and chief consultant, Advisory Legal Consultants Lagos, was quoted in an article that the major shifts in the geopolitics of the gas sector and the socio-political economy of Nigeria called for a radical rethink on gas policy if the country hope to address her challenges energy issue.

“Nigeria has to be very smart and must act very quickly too. Physics electricity and magnetism study guide Another important and relevant dynamic is the apparent aversion of the IOCs for the midstream in Nigeria or even the downstream for that matter, a game that is natural to them and which they play so well in other countries,” he said.

Adeniji further observed that while there were more innovative ways to achieve rapid infrastructure roll in gas, the lack of clarity and undue delay in the passage of the Petroleum Industry and Governance bill create concerns.

He further said that the development of gas infrastructure would help accelerate Nigeria’s elusive and much desired industrial development and economic growth.

The energy expert posited that in the light of the socio -economic issues plaguing the country, and the need for Nigeria as the second largest economy by GDP to effectively challenge her competitors for investors in infrastructure and gas based industries; the gas policy focus should shift towards accelerated investment in the upstream and gas infrastructure.

He maintains that the Government cannot afford to fund the development of gas infrastructure at the pace that Nigeria’s socio -economic developmental requirements, adding that the gas sector is most amenable to private sector capital if the right conditions are put in place.

Nigeria with her huge natural gas reserve stands to benefits from increased capacity production, industry watchers insists saying that natural gas has the potential to engender rapid positive growth and enormous impact in the overall economy of our nation.

They maintain that while it is not difficult to decipher that utilisation of gas has assumed a new dimension for both economic and technological development stressing that achieving the desire result in local gas supply or the lack of it will remain a very sensitive issue with government involvement in unrealistic prices.

Joseph Eziegbo, chief operating officer, Falcon Corporation Limited, observes that Nigeria gas reserves is believe to be higher than oil reserves, saying that as the second largest economy by GDP, Nigeria will get the full benefit of this if beyond eliminating flares, the government encourage investment in aggregating the non-Associated Gas (NAG) resources into usable forms for the overall benefit of the nation’s economy.

In the ranking of world proven natural gas reserves by country, Nigeria is the largest in Africa and the 7th largest globally. Circle k gas station locations Nigeria currently produces an estimated 7 billion scf per day and account for an estimated 182 trillion scf of gas reserve.

Eziegbo in a recent interview with BusinessDay observed that Power and fuel costs traditionally constitute one of the highest single components of the overheads of the industrial sector worldwide.

“Our gas reserves are believed to be higher than our oil reserves, however, we will not get the full benefit of this if beyond eliminating flares, we do not invest in aggregating our non-Associated Gas (NAG) resources into usable forms for the overall benefit of the nation’s economy,” Eziegbo said.