Yemisi Izuora with Agency report.
President of the Nigerian Gas Association Bolaji Osunsanya has pushed for increase in gas prices to attract more investment in the sector.
Osunsanya said if an increase is achieved it will attract an estimated $55 billion of investment needed to plug persistent local shortages .
He told Bloomberg that the recent government increase of gas prices in August for power plants to $2.50 for 1,000 cubic feet from about $0.50 would not encourage the required investment.
Osunsanya, who is also managing director of Oando Gas & Power Ltd., said the investments are needed to explore for more gas, set up five processing facilities at about $2 billion each and develop domestic distribution channels, he said.
International oil companies, which had been export-focused due to low domestic gas prices fixed by the government, have agreed to sell off $10 billion of assets over the past three years, according to Bloomberg Intelligence.
Those assets are largely being taken over by local companies, such as Seplat Petroleum Development Co. and Midwestern Oil and Gas Co. Ltd.
Oando’s $1.65 billion acquisition of ConocoPhillips’s Nigerian oil and gas assets in June made it the country’s biggest indigenous gas producer, with a production of more than 50,000 barrels of oil equivalent.
“We should incentivize people with the best reward and encourage people to come into the fold,” said Osunsanya. “The strategicness of gas is what I wish Nigeria would take more seriously.”