Yemisi Izuora
Nigeria’s indigenous gas producers have sought government interventions and new policy direction that will stimulate investments in the gas sector.
The call is coming as the minister of state for petroleum resources, Ibe Kachikwu said that government has taken bold steps to restructure the country’s gas industry such that it will play a critical role in the industrialisation initiative of the country.
Kachikwu in his remarks at the Light Up Nigeria conference in Lagos Tuesday with the theme, “Repositioning The Energy Sector For Growth” said the approval by the Federal Executive Council, FEC, of the county’s gas policy was a clear indication of governments readiness to fully tap the opportunities available in the midstream sector of the industry.
The minister who was represented by his special adviser, technical Adiniji Gbite explained that the gas policy has certainly provided the path to tackle all the identified challenges in the sector and its implementation will definitely lead to long term development plan.
He assured that it will stimulate competitive environment that will be attractive to foreign and local investors.
According to him, Identifying that natural gas will be an essential part of the future energy mix as the world moves to a low carbon future, we recognised the need to put in place strategic measures to deliver much needed energy for development and growth and collaboratively worked with all stakeholders to develop a new National Gas Policy followed by a national oil policy of which were approved by the Federal Executive Council and have since been gazetted.
We are now working hard to improve our business environment leading to increased investor activity and energy supply thus improving prices of goods and services.
Speaking further Kachikwu stressed that the country’s reform programmes for the gas sector is set out in the National Gas Policy and will additionally be clarified by proposed legislation that will tackle gas commercialisation and with very clear rules or gas activities from the upstream, midstream and downstream sectors.
The legislation he explained will treat gas as an independent commodity rather than a by-product of oil production and also explains the fiscal regime, adding that the legislation will also herald a simplified but clearly defined licensing administration which will regulate the licensing of operators throughout the entire value chain.
As government, he said the present administration recognises the benefits of natural gas as part of its efforts to meet the nations energy need and environmental responsibilities, and accordingly the gas policy articulates a 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 assured that most of the investment required in the sector with be drawn from the private sector as it is designed to stimulate a competitive business environment for both current and new investors
The minister also noted that in recognition of its role in setting the environment and supporting investors with appropriate interventions to bring their projects to fruition, government has occasionally intervened to ensure the execution of critical gas supply agreements that will ensure increased gas utilisation in the country especially for gas supply to two world scale fertiliser plants and to a mini LNG virtual pipelines project that will ensure gas delivery to stranded markets in the country such as northern Nigeria.
In his presentation, president of the Nigerian Gas Association, NGA, Mr. Dada Thomas said the midstream section is highly challenged by pricing issues and imposition of tax on gas.
Similarly, Ademola Adeyemi-Bero managing director First Exploration and Production, said government should not expect to raise money by placing tax on gas rather it should encourage its utilisation through gas to power initiative to encourage value chain growth that will inspire industrial development.