All agreements being used in Nigeria’s gas market would be reviewed to be in tandem with present day market realities, the Gas Aggregation Company of Nigeria Limited has said.
The company said in a statement last weekend that the review had become necessary in order to attract investors to the country’s gas market, adding that a workshop involving 670 operators in the sector was organised on Wednesday to address the issue. The review may lead to a rise in the cost of gas.
Nigerian National Petroleum Corporation (NNPC), international and indigenous oil companies, gas purchasers, gas trade associations and financial service practitioners attended the workshop.
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The workshop was chaired by GACN’s Chairman, who doubles as the managing director, Nigerian Petroleum Development Company Limited (NPDC), Mansur Sambo.
Participants at the event, which was also done virtually, said the review would help expedite the execution of gas sale aggregation agreements by operators, interruptible gas sales agreement, as well as gas swap transactions.
The statement from the management of GACN said the master gas sale and aggregation agreements used in the domestic gas market was being reviewed to provide room for improved investments in the sector.
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The gas firm explained that the updated Master GSAAs templates would help to promote gas utilisation and increase domestic gas consumption when concluded.
It said the templates would also be used for the purpose of enhancing power generation, deepening the growth of other gas-based business ventures and accelerating Nigeria’s industrialisation.
Sambo, according to the statement, explained that the review would support government’s drive to make gas a sustainable revenue source for the country.
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“The Minister of State for Petroleum Resources’ declaration of 2020 as the ‘Year of Gas’ is backed up by several initiatives such as the National Gas Expansion Programme, nationwide gas penetration initiative through LNG-CNG nationwide roll-out, ongoing domestic gas price review. All of these are providing further positive impetus.”
The managing director, GACN, Olalekan Ogunleye, noted that although the Master GSAAs had contributed to the growth of the domestic market, it should be reviewed periodically in accordance with the prevailing market fundamentals.
By Chibisi Ohakah, Abuja