Nigeria is considering a proposal of Willing Seller, Willing Buyer in the gas sector, whereby producers and consumers of natural gas alike can agree on gas prices, whereas the product will be available at all times.
The minister of state petroleum resources, Mr. Timipre Sylva who dropped the hint during a webinar hosted by the Nigerian Association of Petroleum Explorationists (NAPE) said however that special protections will be built in to ensure supply to wholesale customers in strategic sectors.
The strategic sectors include the power sector, gas-based industries and commercial sectors with significant off take possibilities.
The proposition comes on the heels of Nigeria’s largest electricity distribution company, the Ikeja Electric Plc (IE), which celebrated their first year anniversary of their Willing Buyer, Willing Seller initiative dubbed Bilateral Power by customers.
In the Ikeja Electric case, the Bilateral Power service promises customers a minimum of 20 hours power supply and improved service in exchange for cost reflective tariffs. The agreement provides customers 24/7 payment channels for easy vending.
The programme is managed by a dedicated team who address customer complaints, prompt notification of power interruption 24 hours ahead of planned maintenance and provision of dedicated key accounts management team to resolve all issues within stipulated timelines per the Service Level Agreements (SLAs).
Also under the agreement, all the customers are metered and provided meter maintenance services and immediate meter replacement for faulty meters.
Ikeja Electric said since the commencement of Bilateral Power in Magodo Phase 2 in Lagos, a year ago, it has consistently delivered an average of 22 hours power supply, in addition to dedicated customer service help desk and technical fault clearing crew.
Silva said that the proposed Petroleum Industry Bill (PIB), expected to be engaged at the National Assembly within a few weeks, “establishes an attractive fiscal framework for gas that allows low royalty and corporate income tax and a variety of small taxes and levies.”
The bill, he explained, “will establish a gas base price that is higher than current levels for producers and this base price will increase over time.
“This price level should be sufficiently attractive to increase gas production significantly since this gas price will be comparable with gas prices in other emerging economies with considerable gas production.
“The price will be independent of all gas prices for LNG export and is therefore a stable basis for enhanced domestic gas development, regardless of international oil or energy development,” he said.
The minister said the proposed bill also will establish a flexible and comprehensive framework for midstream gas development.
“Gas pipelines and gas processing plants can be built on own account of the investor. In addition, a midstream gas infrastructure fund Is being proposed in the PIB with the narrow focus of unleashing private investment to process gas and transport by pipelines”.
The webinar was part of the series of engagement by the 7,000-member strong NAPE, the largest umbrella group of technical professionals in Africa, with industry regulators and policy makers.
By Chibisi Ohakah,