…Code has in-built modification mechanisms, for review to suit industry dynamics
Nigeria’s Minister of Petroleum Resources, Chief Timipreye Slyva has described the launching of the Nigerian Gas Transportation Network Code (NGTNC) yesterday as a very successful journey with a lot of collective commitment that enabled the country to attain the important milestone. The code was lunched at the opening ceremony of the Nigeria International Summit (NIPS 2020) in Abuja yesterday.
In August 2011, Nigeria recorded a significant milestone in the development of its natural gas for both domestic use and exports, with the completion of the first phase of the National Gas Transportation Network Code that will guide access to gas transmission network. The code was completed and delivered to the Nigerian National Petroleum Corporation (NNPC) by Osprey Investments Group Limited, a British consultancy company and its technical partner, TPA Solutions.
The Code is a contractual framework between the gas transportation network operator and gas shippers that specifies the terms and guidelines for operation and use of the gas network. Among others, the Code will provide open and competitive access to gas transportation infrastructure and development of the Nigerian gas sector.
While unveiling the Code, the minister said in its current form, the NGTNC has in-built modification mechanisms, with opportunities for review of the Network Code to suit the dynamics of the industry. According him, effective from February 10, the Network Code shall apply to all gas transportation arrangements between gas transporter and gas shipper as defined in the Code.
Secondly, the transporter and all existing users of the transportation network shall, within six (6) months of the date of this directive, migrate from existing Gas Transportation Agreements to the Network Code by executing the necessary ancillary agreements, the minister stated
Furthermore, all new and intending users shall make use of the Network based on the terms and conditions provided In the Network Code. Again, while the Network Code remains the uniform protocol for users of the gas transportation network, and can only be modified in accordance with relevant provisions therein. The ancillary agreements are negotiated by the relevant parties.
Slyva said all the directives will be transmitted to all stakeholders by the Director of Petroleum Resources for immediate compliance. He assured the international oil companies (IOCs) of security on their investments. He promised them that they cannot have it better anywhere than Nigeria. “In line with government’s policy to reinforce and expand gas supply and stimulate demand through the National Gas Expansion Programme, the code will provide open and competitive access to gas transportation infrastructure and development of the Nigerian gas sector.
“Also, the code will stimulate the domestic gas supply market, drive gas-based industrialisation and the realisation of the government’s aspiration to move 100 million Nigerians out of poverty,” he said, reiterating the immense opportunities that Nigeria’s gas resource affords with Nigeria’s gas reserves position at 200.79 Trillion Cubic Feet (TCF) as at 1st January 2019. “The drive to optimally explore and produce this resource is driving government’s aspirations for energy security, economic diversification, job creation and enhanced revenue generation.
“Gas and its derivatives as envisaged in the National Gas Policy would surely catalyse our economic growth, and the need for gas transportation infrastructure has to be put in place for the sector to develop. In light of the above, our policy directions are geared towards addressing the infrastructural challenge,” the minister said.
The Nigerian Gas Master Plan (NGMP), the National Domestic Gas Supply 8: Pricing Regulation, 2008 (Section 2 (f & g), and the National Gas Policy 2017 (Section 4.3.3) all stipulate the introduction of Gas Transportation Network Code to guarantee open access to the Network.