*NMDPRA finalising on domestic gas prices, tariffs in support of initiative
Peter Uzoho
As Nigeria progresses with the implementation of the Decade of Gas Programme of the federal government, Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, has advocated for all parties involved in the project’s execution to provide annual status reports of the successes, issues, support required, and target completion dates of the plan.
Similarly, as part of the steps towards the realisation of the Decade of Gas plan, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said it was finalising on domestic gas prices and tariffs in consultation with key stakeholders in line with the Petroleum Industry PIA (PIA) and to boost investment in the gas sector.
The duo of Wabote and the Chief Executive Officer of NMDPRA, Mr. Farouk Ahmed, stated these during their presentations at the just concluded sixth Nigerian International Energy Summit (NIES) held at the International Conference Center (ICC) Abuja, with the theme: “Global Perspectives for a Sustainable Energy Future.”
The Decade of Gas agenda is an ambitious programme of the federal government launched in 2021 by President Muhammadu Buhari and the immediate-past Minister of State for Petroleum Resources, Chief Timipre Sylva to help Nigeria achieve industrialisation, economic prosperity and tackle energy poverty by using gas as an enabler.
The programme is to run from January 1, 2021 to December 31, 2030, and being powered by the government in conjunction with a broad team of stakeholders from the Nigerian oil and gas industry and other linkage sectors.
Managing Director and Chief Executive Officer of the Nigerian Liquefied Natural Gas Limited (NLNG), Dr. Phillip Mshelbila had expressed optimism that the Decade of Gas policy would enable the country to catch up with the developed and industrialised countries of the world if successfully implemented as planned.
But speaking on “Building Local Content and Capacity for the Realization of Nigeria’s Decade of Gas”, Wabote suggested that the status reports would be prepared by agencies, entities and stakeholders that are responsible for the various projects and initiatives identified in the 10-year gas programme and presented at the NIES every year.
He challenged stakeholders not to get distracted or lose steam in the implementation of the programme even as a new administration was set to assume office on May 29, 2023.
While calling for the continuity of the Decade of Gas programme, he hinted that, “it is possible that the incoming government will give the programme a new name but we must not lose focus on the importance of gas to our energy needs and economic development.”
The executive secretary also highlighted eight focus areas the board was utilising to drive the realisation of the Decade of Gas initiative of the federal government.
These, according to him, include Human Capacity Development, Construction of Industrial Parks, Public-Private Partnerships and Nigerian Content Intervention Funds, Research and Development, Regulatory Framework, Regional Collaboration, and Enabling Business Environment.
Dwelling on the capacity building programmes required to enhance the training and re-training of capable workforce for the industry, Wabote explained that NCDMB had “delivered close to 14 million manhours of training for acquisition of various skill sets required to explore, develop, operate, and maintain hydrocarbon facilities.”
He listed some of the Board’s Human Capacity Development tools and programmes to include the Expatriate Quota Management System, STEM Education, Technical and Vocational Education Training (TVET), Institutional Strengthening, ICT Centers, and Training Certifications.
He stated that the Board’s capacity-building programmes were impactful and acknowledged internationally, adding that the survey carried out by African Petroleum Producers Organisation (APPO) to assess the standards in training institutions on the African continent rated Nigeria as one of the top countries with credible institutions for training the required manpower for the oil and gas industry.
Giving updates on the construction of oil and gas industrial parks, Wabote said the board has commenced issuance of allocation letters to credible investors in readiness for the commencement of operations within the NOGAPS Industrial Parks located in Bayelsa and Cross River states.
He informed that, “the NCDMB Gas Hub at Polaku is fully dedicated to domiciliation of gas related enterprises such as Pressure Reduction and Metering Station, CNG mother stations, LPG cylinder manufacturing plant, Gas processing facilities, power plant, and other similar facilities.”
Commenting on the theme of the summit, Wabote said the challenges of energy transition “has brought to the fore the need for every nation to leverage its own comparative cost advantage by developing the energy resources that it has in relative abundance
“Most countries including Nigeria have a mix of these resources, and they must apply local content investments to realise sustainable energy future.”
He described local content development as a philosophy that seeks to encourage the utilization of local resources such as humans, goods, services, oil, gas, wind, hydro, or solar while at the same time promoting in-country domiciliation of value-adding activities.
He further remarked that narratives around energy transition have shifted significantly from energy swap to energy mix and that this was because of the factual recognition that all forms of energy were important rather than demonising one form of energy against the other, simply because some nations have depleted their reserves of certain energy sources.
He also noted that the European Union had re-classified gas and nuclear energy as Green-energy in 2022, while “coal production and consumption are on the resurgence as discussions are now about how to make it cleaner rather than referring to coal as ‘dirty fuel’.”
In his presentation at the summit, Ahmed said NMDPRA was finalising on domestic gas prices and tariffs in consultation with key stakeholders in line with the Petroleum Industry PIA (PIA) and to boost investment in the gas sector, noting that this was part of the steps towards the realisation of the Decade of Gas plan
Represented at the event by the Executive Director, Distribution System, Storage and Retailing Infrastructure, NMDPRA, Mr. Ogbugo Ukoha, Ahmed said the use of natural gas as Nigeria’s transition fuel was one of the 21st Century’s strategic programmes of the federal government of Nigeria that was being implemented through the 2021 to 2035 Strategic Framework known as Decade of Gas.
He explained that the policy was tailored towards accelerated industrialisation of Nigeria, sustainable creation of wealths and jobs for investors and populace and optimal exploration and utilisation of the country’s abundant resources.
Other objectives of the Decade of Gas plan, according to him, were ensuring Nigeria’s energy security amid global energy supply and demand changes, enhancement of technology adaptation and development of key energy infrastructure, and achieving Nigeria’s commitment to netzero.
Ahmed maintained that the programme also aimed at diversification of Nigeria’s revenue sources from export of only crude oil as well as realising the overall economic development of the nation.
He stated, “This programme was launched by the honorable Minister of State for Petroleum Resources in 2021 and it’s fully supported by the oil and gas industry and all necessary institutions of government.
“NMDPRA is committed to ensuring that the clear and compelling aspirations of the programme are fully actualised by providing leadership, authority resource, office space for the project team and all other requirements for successful execution of the programme.
“Success of the Decade of Gas, however, depends on the following: establishing right pricing and tariffs for gas molecules and services; availability of critical transportation and distribution infrastructure; sufficient domestic gas supply and delivery; robust and strategic utilisation infrastructure; payment securitization for deliverable molecules; payment of legacy gas debts; incentivising and de-risking critical investments.
“We are making steady progress on all of the above. First, NMDPRA is finalising on gas prices and tariffs in consultation with stakeholders as required by the PIA. Secondly, NNPC and other investors are progressing on critical infrastructure.”
Ahmed also informed that NMDPRA and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) were ensuring that all current and projected domestic gas demand was met, whether volumes, quality, prices and business rules through the instrument of the Domestic Gas Delivery Obligation (DGDO) and the National Gas Transportation Network Code (NGTNC).
He added that the Authority was making effective regulations and relevant facilitation for the establishment of strategic gas utilisation facilities such as methanol plants, gas distribution systems, Autogas programme, almond others.
According to him, NMDPRA and other relevant stakeholders like the Nigerian Electricity Regulatory Commission were putting in mechanisms to ensure payment to strategic sectors was secured and assured for gas-to-power and that the GSSF was activated and hundred per cent effective.
He stated further that discussions were ongoing with the Commission and the Federal Ministry of Finance on workable plans to clear legacy gas supply debts.
Ahmed also disclosed that the Midstream/Downstream Gas Infrastructure Fund was being activated to incentivise and de-risk investments into critical and strategic gas projects in the midstream and downstream sectors.
“The upstream investments will be made attractive by the existence of right prices for gas molecules and efficient implementation of the DGDO.
“Success is assured with purposeful leadership, due diligence and effective stakeholder engagements, and these we assure you all that we will provide,” he added.
