By Chineme Okafor
The Gas Aggregation Company Nigeria Limited (GACN) has said that its decision to review existing agreements used in transactions within Nigeria’s domestic gas market will not lead to hike in prices of domestic gas.
It said, rather, the review was meant to reflect modern realities in the market and attract new investments in the sector.
“The GACN does not set gas prices. That is the prerogative of the Minister of Petroleum Resources,” it said in a statement from its management to clarify a media report that a review of the Master Gas Sale and Aggregation Agreements (Master GSAAs) used in the country’s domestic gas market will result to price increase.
It explained that the report was out of context on what transpired at an industry-wide workshop it convened with up to 670 industry operators comprising the Nigerian National Petroleum Corporation (NNPC), international and indigenous oil companies, gas purchasers, gas trade associations and financial service practitioners in attendance to find better ways of consummating gas transactions in the country.
The GACN specifically said the Master Gas Sale and Aggregation Agreements (Master GSAAs) used in the country’s domestic gas market was being reviewed to provide room for improved investments, as well as facilitate gas contracting and investments in the sector.
According to it, at the workshop which was chaired by its Chairman and Managing Director of the Nigerian Petroleum Development Company Limited (NPDC), Mr. Mansur Sambo, focus was on reviews that would engender expedited negotiation and execution of Gas Sale Aggregation Agreements (GSAAs) by industry players, Interruptible Gas Sales Agreement (IGSA) as well as gas swap transactions.
It equally noted that the workshop’s objectives included incentivising payment and contract performance, minimising risks and potentials for contract disputes, processes to engender new investment in the gas sector, promotion of contract flexibilities consistent with market realities, facilitation of gas trading and gas swap transactions, as well as reducing transactional costs in the country’s gas market, adding that such exercise could not have resulted in increases in the price of domestic gas.
When concluded, the GACN explained that the updated Master GSAAs templates, Master IGSA and gas swap framework will help to promote gas utilisation and increase domestic gas consumption, including for the purpose of enhancing power generation, deepening the growth of other gas-based business ventures and accelerating Nigeria’s industrialisation.