The Managing Director and Chief Executive Officer, Nigeria LNG Limited, Mr Tony Attah, has called for the passing of a regulatory framework for the upstream sector.

Speaking during the kick-off meeting of the Engineering, Procurement and Construction (EPC) components of Train 7, the LNG boss said the regulatory framework will increase Nigeria’s presence in the global LNG market, which serves as an opportunity to harness the gas for domestic consumption.

Attah noted that Nigeria is currently faced with challenges such as gas pricing for the domestic market, limited infrastructure for distribution and a commercially-viable market.

“The FID for Train 7 and award of its EPC contract is very reassuring, as it renews our hope that Nigeria LNG will maintain a significant market share in the global gas market and will continue to reap the potential benefits in the market.

“Whilst a quick switch to renewable and other cleaner energy sources is desirable, current data indicates that the practical reality is that it cannot be achieved on a global scale as quickly as many parties are pushing for.

“We must, therefore, find a way to bridge the gap between where we are today, and where we desire to be. This is the role that gas is expected to play in the medium and long-term,” he said.

Attah said there are vast opportunities available in Nigeria’s huge gas reserves in comparison to crude, and other prospects the Train 7 project will offer the country. “We have proven 200 tcf of gas, and we have another 600 tcf that we know about but need to prove under the SEC rules. Today, as number 9 in the world in terms of gas reserves, if you prove the 600, you go straight away to number 4, ahead of Turkmenistan.

“For me, that is a major opportunity to really jumpstart the sector. A lot depends on the fiscals and how the government is able to incentivise gas development, which must happen,” he said.

He hinted that Nigeria LNG has also concluded plans to take advantage of the opportunities to develop a domestic gas market and spur gas-based industrialization. This is in addition to increasing the country’s footprints in the Global LNG market through the execution of Train 7.

“We are currently looking at bringing LNG in-country. With the global market dwindling, we see very high demand for gas and other forms of energy in Nigeria, and indeed in Africa. As you know, more than 50% of the population that does not have access to energy in the world is in Africa.

“So, the domestic LNG project that we are looking at is to be piloted in Nigeria and then we will go regional and then look at Africa as a whole. It’s a project that’s already on. As we speak, there are a few people that have already indicated interest, and we are working with them to see how much capacity they are able to develop to make this real.

“We have just established that the price is no longer within anybody’s forecasts, view or control, we perhaps have a future where we have to be a market maker for this to be able to have the essence of the full value chain coming to fruition in-country,” Attah said

Chibisi Ohakah, Abuja

The federal government on Sunday showed its readiness to review the country’s current pricing template for petrol.

Adjusted four years ago, the FG said the pricing template review is targeted at reducing alleged exploitation of Nigerians by the operators in the downstream sector.

The FG stated that it was finalising the re-adjustment of cost elements and profit margins on the pricing template for marketers to reflect the current market-driven pricing regime and ensure that consumers are not overcharged.

In a statement by the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Saidu Abdulkadir, the agency said it was also collaborating with the Ministry of Petroleum Resources and Ministry of Justice, which have put in place a regulation on petrol market-based pricing regime.

On the sustainability of the pricing regime without a regulatory or legal framework, Abdulkadir said extant laws such as the PPPRA Act No. 8 of 2003 and the Petroleum Act gave the agency the legislative backing to formulate policy initiatives on pricing regime.

He noted that the PPPRA Act also empowered the PPPRA to limit price gouging, create a level playing field for operators and protect consumers.

“In accordance with the above, the development of guidelines for petroleum products commercial framework has been concluded and code of conducts for operators is currently being prepared to reflect the present price regime.

“The agency, in collaboration with the office of the Honourable Minister of State for Petroleum Resources and the office of the Attorney-General of the Federation has put in place, a regulation on the petrol market-based pricing regime,” he said.

According to the Agency, transitioning to a fully deregulated market has come with its pains, including holding stock of products bought at higher prices, non-availability of foreign exchange for importation of petroleum products and slow depletion of stock due to the COVID-19 pandemic.

“These challenges are currently being managed. On a positive note, the PPPRA is currently finalising the review of cost elements and profit margins on the pricing template for marketers to reflect the current market-driven pricing regime, which was last reviewed in 2016 while ensuring that consumers are not overcharged,” it said.

The agency explained that the new price template would take into consideration some factors which include amongst others: petroleum product cost, foreign exchange (forex) rate at which oil marketing companies (OMCs) import petroleum products.

Other associated cost components, it said, included freight rate, transshipment cost, statutory charges, terminal charges (storage and jetty throughput), financing and distribution margins (wholesalers/marketers, transporters, retailers, bridging fund and administrative charges.

While stressing that the agency does not fix prices, the PPPRA said it rather provide a guiding price band by monitoring petroleum products prices daily; using the average price of the previous month to determine prices for the following month, for appropriate cost-reflective pricing that ensures reasonable returns for marketers.

On why it was not possible for the government to fully hands off pricing, despite deregulation, PPPRA said the enforcement of appropriate laws by strong regulatory agencies was needed in the downstream.

“Different fully deregulated sectors of the polity operate under the guidance of national regulators. The NBC regulates broadcasting, NCC regulates telecommunications; NERC regulates the power sector; the banking sector is being regulated by the CBN and the same exists for operators in Nigeria’s downstream petroleum sector,” it explained.

The agency emphasised that the new pricing regime is a market-reflective pricing system where it advises marketers on guiding price, stressing that although crude oil price and petroleum products prices are positively correlated, the prices of petroleum products do not increase or reduce correspondingly with changes in crude oil price.

“The pump price we expect to see will be a reflection of the international market prices of petroleum products that are also rising,” it added.

Peace Obi with agency report

Peace Obi

President Muhammadu Buhari will on Tuesday finally flag off the construction of the Ajaokuta-Kaduna-Kano (AKK) pipeline, thereby set to realize the long held dream of building the nation’s biggest domestic gas transmission infrastructure.

The 614 kilometer gas pipeline conceived to provide the highly desired stimulus to domestic industrial growth will be delivered by a consortium of indigenous and international engineering firms. This project will also signal the finest hour so far for the Nigerian Content Policy  goals.

The president, by the flag off  of this project at Ajaokuta, Kogi State, would be turning to reality some of the nation’s long term economic aspirations of,( a) boosting domestic energy infrastructure, (b) deepening the local gas market, (c) creating industrial corridors with cleaner fuel, and (d)commercializing the country’s abundant gas resources.

The project, according to the Nigerian National Petroleum Corporation (NNPC), will significantly curb gas flaring in the Niger Delta and guarantee better air quality in the oil producing region. 

Furthermore, the pipeline which was conceived to connect demand from the northern part of the country with supply from the south would be the biggest infrastructure development in the country’s recent history.

 It will also mark a significant shift in the nation’s energy policy; from revenue targeted export programmes to development focused domestic supply programmes.

Significantly, the $2.8 billion project will break through on the 30th of June after seven years of rigorous processes that morphed from policy conception through implementation strategy designs, master-plans and solid implementation programmes.

Perhaps the biggest value to the economy is the participation of indigenous engineering firms led by pipeline giant, Oilserv Limited, in the delivery of some of the phases of the project.

The company has successfully delivered over 17 similar challenging projects in the country including the engineering, procurement and construction (EPC) of the 67 kilometre Obiafu/Obrikom to Oben (OB3) 48 inch diameter Gas Transmission Pipeline System.

The Oilserv consortium is slated to deliver the first 200 kilometre phase of the AKK pipeline which covers the section between Ajaokuta and Abuja, after securing the EPC contract in April 2018.

Nigeria’s Presidency had confidently asserted that,  the AKK “pipeline project is itself a section of an ambitious pipeline project to supply gas to Europe through the proposed Trans Sahara Gas Pipeline (TSGP) and Nigeria Morocco Gas Pipelines.”

Thus, in the short term the AKK will ensure energy sufficiency for domestic commerce and industry, and in the long term, having deepened and satisfied domestic demand, morph into an export pipeline and economic mainstay. 

The AKK pipeline in Nigeria’s prevailing socioeconomic   downturn will prove to be fortuitous as well as strategic even as the world steps away from fossil fuel. 

Beyond the immediate need to stem the devastation of the corona pandemic and stimulate activity in the domestic economy, the AKK which is already potentially poised as a very central economic  powerhouse in Nigeria, will also create deeper, more enduring values:

 1.multiplier effect in the local content circles. 

2.Cleaner environment for the host communities 

 3.Accelerated technical growth, 4.Direct citizen utility. 5.Industrial convenience, and of course 6.General broadening of the the economy, etc.

Oilserv Ltd, under the able leadership of its Group Chairman, Dr Emeka Okwuosa, is honoured to be a part of this historic project, and welcomes Nigerians to witness the special  moment when  President Muhammadu Buhari flags off the long awaited AKK.

Orient Energy Review

Shell Nigeria Gas (SNG) has completed the final phase of its 20km domestic gas pipeline expansion project in Abia State, connecting Agbor Hill, Osisioma and Araria industrial zones.

The project has also enabled the supply of pipeline gas to Ariaria Market Energy Solutions Limited, the Independent Power Project (IPP) consortium that provides electricity to the popular Ariaria market in Abia State.

Ariaria International Market is one of the largest leather shoe-making and open stall markets in West Africa, with over 37,000 shops and an estimated one million traders. 

Managing Director, SNG, Ed Ubong, said, “We are proud of this domestic gas infrastructure investment which allows the industries in Abia to have more reliable and cleaner source of energy. SNG is committed to supporting Nigeria’s industrialisation provided there is a stable regulatory environment in the domestic gas sector that allows investors recover their investment .”

Managing Director, NICEN Industries Limited, a paint and plastics manufacturer connected to the pipeline gas, Christopher Eze, said, “SNG has put life back into our industries in Aba through the provision of this natural gas line.

“This milestone will open up the state for an influx of investors thereby creating an enabling environment that will generate job opportunities for the youth of the State. I am sure that many industries in Aba will quickly take advantage of this great opportunity. Our company sincerely appreciates SNG for this great feat”.   

Also speaking on the completion of the expansion project, President of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed, said, “MAN is proud of the role that Shell is playing in driving industrialisation in Nigeria through domestic gas supply. Industries and manufacturing plants play a key role in transforming the Nigerian economy and this project will connect many manufacturers in Abia State, one of the nation’s major industrial hubs, to pipeline gas, which is a cheaper, cleaner and more reliable source of energy.

According to Ahmed, the gas supply to the Ariaria Market IPP would strengthen micro, small and medium enterprises in the Abia State and enhance the operating environment for manufacturing to thrive.

SNG together with its partners and local stakeholders has agreements to build infrastructure and deliver natural gas to over 150 industrial and commercial customers, mostly in Ogun, Abia, Rivers, Bayelsa and Lagos States. This will drive industrialisation, provide employment for skilled and unskilled local population in addition to directly improving internally generated revenues in these states.

With a reputation for safety, credibility and reliability, SNG has maintained a 16-year streak of successful ISO 14001 certification and has operated for over 10 years without any lost time injuries.

Orient Energy Review

Event will focus on Africa’s energy transition, industrialization, regional business and economic transformation.

The fifth edition of Africa Energy Conference organised by the Africa Oil Power (AOP) returns to Cape Town’s International Convention Center on October 5-7, 2021 for three days of deal-making and discussions focused on Africa’s energy transition, industrialization, regional business and economic transformation.

The event was rescheduled from September 15-17, 2020 due to the unpredictability of the Covid-19 pandemic.

The organizers said in a statement yesterday that in its 2021 edition, global attendees are being invited to participate via a new virtual format, alongside the in-person conference.

Under the theme “InvestWithoutBoundaries”, the conference enjoys the partnership and endorsement of the Department of Mineral Resources and Energy of South Africa, the South African Chamber of Commerce and Industry, the South African Oil Gas Alliance and the South Africa-

In the midst of the COVID-19 pandemic, governments across the world are looking at implementing policies to stimulate investment and kick start the growth of energy economies.

As global economies recover, international partners and continental actors are looking at African opportunities anew, and re-evaluating LNG, renewables, privatized power and oil and gas projects.

The current downturn in the global oil sector is expected to see an uptick as lockdowns are lifted and the global economy is restarted. A price recovery, coupled with renewed interest and activity in the energy sector, will act as major catalysts for African growth and intra-African economic activity.

Africa Oil Power (AOP) 2021 highlights African integration across borders throughout the entire energy value chain and examines the African investment environment post COVID-19.

The event welcomes presidents, ministers, national oil companies ‘and utility heads, IPP and renewables executives and more. AOP 2021 is the only event on the continent that fully unites power with petroleum, focusing on the driving factors behind Africa’s energy transition.

Meanwhile, the African Continental Free Trade Agreement will lure investment, encourage job creation and place an emphasis on the need for new technology and cross-border collaboration post COVID-19.

For the first time, AOP will host the Africa Renewables Forum, the Africa LNG Forum and the Energy Finance Forum, in line with the vision of South Africa’s Department of Mineral Resources and Energy and government and private sector partners from all four corners of the continent.

AOP 2021 is the culmination of a 2021 program of events which includes Mozambique Gas Power taking place in Maputo 8-9 March 2021; Gabon Oil Power which will be held in Libreville on 15-16 March 2021; Nigeria Oil Power in Lagos on 30 March – 1 April 2021; Angola Oil Gas 2021; South Sudan Oil Power 2021 and AOP’s first ever event in Uganda.

Chibisi Ohakah, Abuja

     …To develop the NLNG Train-7

Nigeria LNG Limited (NLNG) has secured a landmark US$3 billion Export Credit Agency (ECA)-backed hybrid corporate financing from Deutsche Bank Luxembourg S.A. to develop the NLNG Train-7 Project, Global Legal Chronicle reported on Tuesday.

The NLNG Train-7 is a joint venture owned by Nigerian National Petroleum Corporation (NNPC), Shell, Total and Eni. A press statement issued by global law firm, White and Case LLP, which advised Deutsche Bank Luxembourg S.A. on the deal, said Deutsche Bank acted as Global Facility Agent, International Commercial Bank Facility Agent, K-SURE Facility Agent, SACE Facility Agent, K-Exim Facility Agent and Intercreditor Agent.

“This first hybrid corporate financing for development of an LNG project in Africa sets the benchmark for future LNG facility financings globally and was provided Export Credit Agencies, Development Finance Institutions and over 26 international and local commercial banks,” the statement read in part.

In a related development, the Nigerian Content Development and Monitoring Board (NCDMB) and the NLNG Tuesday formally teed off the Train-7 Project with a meeting on the Engineering, Procurement and Construction components of the project.

Simbi Kesiye Wabote, Executive Secretary of NCDMB, said the virtual event offered a chance to NCDMB officials to clarify some technical issues pertaining to the Nigerian content components of the project.

Wabote described the Train-7 project as record breaking, adding that the journey had been characterised by many firsts, especially in methodology, stakeholders’ awareness and participation as well as speed of completion of the regulatory approvals by the board.

He stated that the signing of the Train-7 contract in the midst of the COVID-19 pandemic was a global record, adding that it provided the country the much-needed boost in the current challenging times.

“We must not just limit ourselves to the Nigerian content levels contained in the Nigerian Content Plan (NCP) and the Nigerian Content Compliance Certificate (NCCC). We must push the boundaries so that upon completion, we can brag about the values that the project would have added to the oil and gas industry as well as the country at large,” he said.

The NCDMB boss urged the contractors to embrace “we can do it here” spirit with respect to employment generation, trainings for new skills, in-country capacity utilisation, addition of new capabilities, Research and Development as well as uncommon innovation into uncharted territories.

Chibisi Ohakah, Abuja 

The Nigerian government has muted plans to review the prices of gas consumed across the country. Minister of State for Petroleum Resources, Timipre Sylva, said there was a need to have an appropriate pricing system, as this would be to the advantage of ordinary Nigerians and industries, and would boost the country’s gas sector.

He said the move would also help deepen the use of liquefied petroleum gas, also known as cooking gas, as well as compressed natural gas (CNG). He explained in a statement on Tuesday that the Nigerian government by his move intends to shift motorists in the country from the use of petrol to the use of CNG in their respective vehicles.

In a statement issued by the ministry, Sylva said the government would continue to push for the use of gas for cooking and in automobiles in Nigeria He said it is the plan of the federal government to review the country’s domestic gas pricing framework at the inauguration of a committee that would focus on gas sector review in Nigeria.

According to him, a committee has been set up by the ministry to evaluate and review gas prices nationwide in order to align with the current economic realities.

Sylva recently told journalists in Abuja that gas penetration in Nigeria was low because the initial capital outlay to be spent by any prospective gas user was high. This, according to him, was why the government decided to come up with the initiative of creating micro gas distribution centres, where cylinders could be rented by users.

The minister had further noted that the possible hike in petrol price in the near future following the rise in global crude oil prices was another reason why Nigerians should switch from petrol to gas.

Sylva explained that with a liberalised oil sector, the cost of petrol would continue to fluctuate, adding that since Nigeria was more of a gas country, it would be better for citizens to use the abundant gas resources located across the country.

Chibisi Ohakah, Abuja 

The Nigeria Department of Petroleum Resources (DPR) has expressed concern over non-compliance of oil and gas companies operating in the country to established protocols aimed at containing the raging COVID-19 pandemic.

The concerns were raised by DPR, which is the regulator of the Nigerian oil and gas industry, in a memo on Tuesday to oil and gas operators on the management of the Coronavirus. The circular read: “We wish to commend your efforts in implementing stringent measures to contain the spread of COVID-19 in your immediate environment and areas of operations in line with government’s directives and circulars issued by the DPR.

“In spite of these efforts, the industry has sadly recorded COVID-19 cases in some offshore and remote locations, many of which are linked to non-adherence to established protocols.

“It is worrisome to note that some personnel of government authorities do not subject themselves to the controlled isolation period which forms part of the protocol for the management of COVID-19 by operators prior to embarking to these locations.”

The DPR said that such act of non-compliance can severely disrupt activities in the industry which is a critical sector of the Nigerian economy. According to the Department, non-adherence to the established protocols puts everyone at various ends of the value chain at risk as COVID-19 does not recognise profession, level or cadre.

“Consequently, and pursuant to Regulation 45 of the Petroleum (Drilling & Production) Regulations, 1969, no personnel (including government authorities) shall be permitted to embark to offshore and remote locations in the oil and gas industry without being fully subjected to established protocols.

“Furthermore, all operators are to ensure that evidence of compliance with the protocols by personnel travelling to offshore and remote locations are duly documented. For the avoidance of doubt, no personnel shall be granted waiver of any sort. This is for your immediate and strict implementation,” the circular read.

It would be recalled that on June 20, the government of Rivers State was forced to impose a total lockdown of the Bonny Local Government Area and Onne community in the Eleme LGA to check the spread of Coronavirus in the LNG rich enclaves in the state.

Governor Nyesom Wike, said the lockdown was in pursuant to the fundamental objective of stopping the spread of Coronavirus. “We have reviewed the situation in Bonny Island and Onne communities and come to the conclusion that a total lockdown is necessary at this time to shut down the continuing spread of the virus in these communities,” he said.

“All entry and exit from the two communities, except those on essential services and duly permitted, are also banned. Security agencies have been directed to enforce the lockdown by arresting and prosecuting anyone who dares to disobey these directives.”

The governor noted that, with a total of 866 positive cases out of 2,572 tested samples at the time of the broadcast, the state was gradually becoming the next epicentre of the virus in the South-South region of the country.

He said, though the state had recorded 30 deaths, including prominent persons, and 356 persons had recovered and were discharged from treatment centres, residents should prepare for more COVID-19 infections and deaths.

Chibisi Ohakah, Abuja