NCDMB Conference: Stakeholders Say Appropriate Pricing Tied To Gas & Power Development

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By Chibisi Ohakah, Abuja

Group executive director, gas and power, at the Nigerian National Petroleum Company (NNPC), Abdulkabir Ahmed, has argued that without the right pricing for natural gas and electricity, it may be difficult to develop the Nigerian energy sector.

Ahmed who spoke at the just concluded Practical Nigerian Content (PNC) Conference in Bayelsa, organised by the Nigerian Content Development and Monitoring Board (NCDMB), said to ensure cleaner energy sources, Nigeria needs to refocus its energy mix, deepen the usage of gas, and draw funding into the sector.

The position of the NNPC comes on the heels of the hint last Tuesday by the President of the Nigeria Liquefied Petroleum Gas (LPG) Association, Mr. Nuhu Yakubu that his group is engaging relevant agencies and stakeholders with a view to addressing issues arising from the prolonged era of foreign exchange, high prices and instability in Nigeria’s LPG sector.

The Association had called on the Nigerian government to package new incentives to stimulate investment, processing and utilization of LPG in Nigeria in line with the nation’s Decade of Gas agenda. Association also cried out that the high prices of LPG in Nigeria is shifting demand to firewood and charcoal, and thus fueling desertification and erosion with a very negative impact on the environment.

At the Practical Nigerian Content (PNC) Conference in Bayelsa, the NNPC chief noted that the LPG sector gasps for massive infrastructural development to stimulate and sustain expansion in the coming years.

Ahmed spoke on the same panel that had chief executive officer, Gas Aggregation Company of Nigeria (GACN), Olalekan Ogunleye; managing director, Shell Nigeria Gas, Ed Ubong; chief executive officer, ND Western, Eberechukwu Oji; and director, Services and Offshore, Oilfield Equipment, Baker Hughes, Stephen Adeyemo.

They agreed that funding was a major in the oil and gas sector in Nigeria. According to them,   critical stakeholders can leverage on technology and experience to overcome the challenge of projects financing.

“Funding for fossil fuels is generally low and, therefore, it poses a lot of challenge. However, we cannot do without investment in this sphere. Therefore, we need to leverage on technology, leverage on industry experience, so as to produce more with less cost.

“The second area that we look at is gas and power. Now, gas and power work together, because the power is fuelled by gas. So, in as much as you’re looking at your opportunity, we have to look at where the gas will come from, who provides the gas? Where do we also get the gas for use? Do we have adequate infrastructure to move the gas around, to utilize the gas for what is useful as well as put up adequate skills to ensure that we boost production, transmission and transportation?

“All these are not obtainable except we have a transparent and market-driven gas market as well as electricity pricing. Without that, it will be difficult to go back to the upstream and put in money if you have no feasibility about upstream costs.”
The NNPC chief hinted that efforts are on to bring in vehicles that would run on gas as well as the skills to improve domestic gas production. Ahmed called for regional and international cooperation in the areas of gas production, transportation, and utilization, especially for power generation.

“We need to develop an appropriate gas pricing as well as policies and investment packages. The Petroleum Industry Act (PIA) has done some significant improvement on some of the existing laws on gas. “It has opened up some bottlenecks that used to exist. Therefore, there are now several opportunities. Moreover, you have a lot of areas for investors to come in and put their money. They can look at auto vehicles, power plants can come, heavy industries, petrochemicals, fertilizers etc.”

The panelists agreed most of the gas production in the country was under the control of foreigners, describing the situation as worrisome. According to them, majority of gas projects and events are driven by foreign nationals. Indigenous oil sector leaders in Nigerian need this task of continuously engaging with the public to expose them.

The equally noted that the necessary environment has been created, in view of the PIA, the Decade of Gas, autogas, etc. The new environment, the said, has created a spectrum of new commercial opportunities, big and small waiting to be tapped

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