Chineme Okafor in Abuja
The federal government has said that for now, the Covid-19 has not affected the demand for gas, adding that the final impact of the virus was still uncertain.
The government, however, noted that outbreak which has impacted oil demands and prices offered Nigeria an opportunity to prioritise its gas market, adding that if stakeholders worked hard, gas could replace oil as the country’s main foreign exchange earner.
In a presentation made on behalf of the chair of the National Gas Expansion Programme (NAGEP) to Nigerian Gas Association (NGA) virtual business forum by Mr. Justice Derefaka, who is the Technical Adviser on Gas Business to the Minister of State for Petroleum Resources, Mr. Timipre Sylva, the government said it was working to build a stable gas market for the country.
It added: “The Covid-19 pandemic has hit Nigeria’s economy harder than any event as it has shuttered businesses and restricted freedom of movement,” but that, “demand for gas has not plunged… at least for now.”
“The ultimate impact of the pandemic is still uncertain and will depend heavily on whether an effective vaccine can be developed. The crisis offers gas industry players a chance to refocus on long-term sustainability; the use of natural gas to diversify the Nigerian economy.
“Gas industry players must now walk a fine line between urgent and important decisions, balancing short, medium and long-term trade-offs to navigate through the crisis and forge ahead.”
The government noted that it would expect gas market players to stabilise and building resilience in the medium term through cost reduction programmes, employee development initiatives and other measures as they prepare for recovery from Covid-19.
It stated further, “Nigeria is not beyond redemption. We must navigate this fog of uncertainty. Parochialism and hubris will lead to failure. Victory requires unity of purpose and leadership on a Rooseveltian scale.”
To get back to business, it urged players in the market to re-power, adding that, “the most ambitious strategic approach is to treat the pandemic as an opportunity to fundamentally reshape the gas sector and prepare for the long-term global transition away from carbon-based resources.”
In addition, it stated that, “this could create a new gas-based economy that would ultimately replace revenue from crude oil sales with value coming from new activities such as green hydrogen production and environmentally-sustainable heavy industries.”
“This is a bold vision and represents the best path forward. As an oil-dependent nation, we must do more than merely hope for the past to return.
“Instead, post COVID-19, we must seize the opportunity to transform and diversity our economy with the abundant natural gas resource. The world is gradually turning away from crude oil to gas to drive their economies.
“Our collective efforts and putting all machineries in place to make gas a critical catalyst to our economic development should be a priority,” it stated.
The government posited that the industry could be averse to risk, bust still needs to prepare with efficient strategies for the changing world which could come after Covid-19.
“Post COVID-19 will demand new thinking on local content practice in the gas space. As for natural gas, the onset of a global recession may affect demand, though not as much as oil. Supply adjustment will be limited, and even associated gas reduction will take time,” it explained while indicating that planned gas development projects such as the Train-7 of the Nigerian Liquefied Natural Gas (NLNG) could see some adjustments in their implementations.