Gas supply: IOCs call for FG’s intervention in payment of $1bn debt
…We are determined to resolve all issues – Presidency
…FG to roll-out new gas price soon — NMDPRA
…NUPRC targets $100m from sale of flared gas
Following Nigeria’s ambitious goals to harness the country’s vast gas reserves to drive economic growth and development, International Oil Companies (IOCs) have called on the Federal Government to meddle in on debts owed by power generation companies totalling over $1 billion legacy debts.
The IOCs made the demand at the official opening of the Decade of Gas secretariat at the Nigerian Midstream and Downstream Petroleum Regulatory (NMPDRA).
The companies which made the demand through Chevron Nigeria Limited said the payment for gas supplied to the power sector and commercial pricing of the product are necessary for the companies to produce more gas.
The Chairman/MD of CNL, Mr. Richard Kennedy represented by Chevron’s Joint Venture Director, Mr. Cosmas Iwueze said: “The decade of gas is to ensure that we re-establish investors’ confidence in the industry. You do this by ensuring that all the legacy debts owed to the industry operators are paid and also ensuring that we have a cost reflective gas pricing.”
Kennedy went on further to state that the IOCs would support the decade of gas plan being pushed by the Federal Government.
We are determined to resolve all issues — Presidency
The Special Adviser to the President on Energy, Olu Verheijen has reiterated the commitment of the President Bola Tinubu administration to resolve all the legacy issues that would attract investment into the gas sector.
She identified that the development of gas was a priority programme for the current administration.
According to her, “It has been a long journey with gas in this country. We have gone from being a major exporter of LNG to looking into our future when gas is going to play a big role in the industrialisation of our country.”
FG to roll-out new gas price soon — NMDPRA
The Chief Executive of the NMDPRA, Engr. Farouk Ahmed however revealed that a new gas price regime would be announced soon.
These, according to him, are part of efforts to make the gas supply to power sector attractive.
According to Farouk, “The decade of gas declaration by the Federal Government was a deliberate effort to ensure that in the next 10 years (2021-2030) gas would become the main source of energy in the country.
“The new price of gas will be revealed after further consultations and approval from the President. We need a price that gas is sold to power and to industry at a level that incentives the producers to invest in the sector and so that they can produce more gas.”
…NUPRC targets $100m from sale of flared gas
The Nigerian Upstream Regulatory Authority (NUPRC) is however targeting a revenue between $80m – $100m from sale of flared gas.
In a press statement, the Commission Chief executive, Mr Gbenga Komolafe said, “In line with the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018, Flare Gas Buyers will emerge with the execution of the Suite of Commercial Agreements by the Preferred Bidders with the Commission and the respective producers as the case may be. Execution of the aforesaid agreements enables the bankability of the Programme.
“The multiplier effects of the NGFCP on the economy are many, including job creation, direct and indirect, creation of cottage industry and other economic activities around flaring communities, improved health, and social economic well-being in producing areas, and enhanced social license to operate. When considered holistically, the total Gross Domestic Product, GDP impact of implementing the NGFCP could be over one billion US dollars.
“We expect additional sources of revenue for the government from taxes collected from new ventures created and modest revenues from the fees charged during the auction process. It is, however, anticipated that the commission will generate between $80 million and $100 million per annum from sales of flared gas, in addition to tax revenues. Following its inauguration in August 2022, the NGFCP team indeed hit the ground running and we are confident that an accelerated implementation will be realised as intended.”
Komolafe speaking at the ongoing Nigeria Oil and Gas (NOG) conference in Abuja alao revealed that the Federal Government has concluded work on the competitive bidding round for the award of licenses to investors interested in developing the nation’s 50 gas clusters under the National Gas Flare Commercialisation Programme (NGFCP).
Komolafe noted the winners would soon be announced, adding that the Federal Government remains committed to developing Nigeria’s abundant gas for domestic utilisation and export in line with the Petroleum Industry Act, PIA.
He also urged local and foreign investors to have trust in the nation’s economy, especially with the signing of the PIA into law and the commitment of President Bola Tinubu to boost investment in energy and other sectors.
The NGFCP aims at harnessing the nation’s flared gas for economic utilisation, thus reducing massive flaring while generating additional revenue for the government.
