FG to save $800m as it seeks investors to commercialise flare gas

by Bill Okonedo

February 8, 2018 | 7:43 am
  |     |     |   Start Conversation

… stakeholders want government to hands off gas infrastructure

Olusola Bello

The Federal Government is seeking investors that would be off- takers of the gas being flared by joint venture companies in order to save the country some $800million losses it suffers annually.

According Justice Derefaka, programme manager Nigerian Gas Flare commercialisation programme (NGCP) in the office of the Minister of Petroleum Resources, who disclosed this on the sideline of the ongoing West African International Petroleum Exhibition and conference holding in Lagos, the government is ready to invoke the section of the Petroleum Act which gives the minister of Petroleum Resources the power to take the gas being flared and commercialise it.

Derefaka said since the joint venture companies have failed to commercialise the over 700- 800 million cubic feet of gas per day being flared, the government would have no choice but to take the gas and commercialise it for the purpose of power generation and other uses.

Nigeria flares about 289 billion standard cubic feet of gas annually. The power sector uses 700 million standard cubic feet of gas per day.

Meanwhile, some of the stakeholders who spoke at the conference have warned that unless strategic gas infrastructure like the Escravos-Lagos Gas Pipeline, proposed Ajaokuta and Kaduna and Kano gas pipeline, East – West Gas pipeline under construction, are private sector driven, they are not likely to attract the type of investments that would make them sustainable.

According to them, the government should just be an enabler and allow the private sector to take full charge of the operations of such infrastructure in order to attract the necessary investment in that gas subsector.

Austin Avuru, managing director of Seplat Petroleum Development Company, said that if the gas pipelines and power infrastructure currently being put place are to be viable and not go the way of infrastructure such as the refineries, Ajaokuta steal project, the Nigerian Railway Corporation and Nigerian Airways, then the private sector must be allowed to take charge of the running of these projects.

Avuru said the issue of the Nigeria Gas Company that manages the gas pipelines is very worrisome as it may not efficiently manage the infrastructure successfully to the satisfaction of other stakeholders in the gas industry, especially when the running of the gas pipelines becomes more technical and complex.

“It is true that the government is making efforts to double the gas in-take of the Escravos-Lagos Gas Pipeline from one billion standard cubic feet of gas per day to two billion standard cubic feet of gas per day, the Ajaokuta to Kaduna and Kano proposed gas pipeline is not going to be a standalone pipeline, as it is going to feed from another pipeline. So if anybody is investing it AKK pipeline, he must ask himself where is the gas to feed the pipeline coming from. The investors must look at it within that context”, he said.

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by Bill Okonedo

February 8, 2018 | 7:43 am
  |     |     |   Start Conversation

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