Addressing gas investment challenges in Nigeria

Making investment in gas in Nigeria today remains a very hard nut to crack for reasons which industry analysts are saying government should intervene in the sundry matters that are now bedeviling the sector.

Gas is seen as the next investment destination for Nigeria’s wealth creation because a lot of countries are moving away from crude oil which is not as clean as gas. However, to attain this goal there is a number of booby-traps that are discouraging would-be investors from investing in the sector.

Investors must have confidence to invest in the country. Critical issues in doing business in Nigeria, such as multiple regulation, lack of sanctity in contract and sundry taxation constituting nuisance to business development must be nipped in the bud.

Investment should not be led by government but experts that will drive the business while funding, legislation, security are paramount for a viable gas hub in the country.

An investor focuses on the value chain on ground which include source of the upstream aspect, midstream capability and the downstream. If any of the elements in the value chain is not maintained, there will be issues, suppose, there is no capacity to pay for gas there will be no need to unlock gas potentials when other stakeholders within the value chain do not have the capacity or ability to invest.

The project will fail. Analysts say therefore, to fund gas investment, the government must attract investors and they must be assured about the sanctity of they getting a good return for their investment in gas sector. It after this that Investors will have confidence to invest.

Critical issues in doing business in Nigeria, such as: multiple regulation, lack of sanctity of contract and sundry taxation constituting nuisance to business development must be nipped in the bud.

Concerned about the present situation of gas in Nigeria, stakeholders expressed their thoughts about gas development in the country.

Layi Fatona, managing director of Niger Delta Petroleum Resources (NDPR while expressing his views with regards to gas business in Nigeria, he said that the ease of doing business in the country and formalization of the process is cumbersome due to regulatory issues.

On sustenance and maintenance of gas infrastructure in Nigeria, he said, there must be infrastructure before maintenance. Fatona added that any investor who invest in gas infrastructure since it an expensive venture will definitely provide a space for protection, “just as it is in the oil business today, onus will be on the owner of the asset to ensure that they are protected.”

Processes for doing business has to be done with ease while access to fund for investors should be easy as well. Nigeria needs to work on its cultural shift to attract needed capital into the country for investors to thrive.

At recent held annual general meeting by the Nigerian Gas association (NGA), Wole Ogunsanya, a member of NGA counseled the association to be involved in legislative process of gas in Nigeria. He made it known that the Content Act that was signed in into law in 2010, the Petroleum Technology Association of Nigeria (PETAN), an umbrella body for oil service operators was at the beginning of the Local Content policy and worked with legislators to in order to have a virile law, NGA has to take a cue from this initiative. The association has to lobby, contribute and draft laws that will uphold the gas sector..

Emphasizing on gas hub in the country, Stephen Ogunlabi, recalled that Vice President Yemi Oshibajo said the federal government is planning to build a gas industrial Park at Ogidiben in Delta state but unfortunately, the status of the project is not known. It is unclear if the project is either abandoned or suspended.

Dada Thomas, chairman NGA in a remark at that meeting reiterated that there should be a Petroleum Industry Bill (PIB) with virile fiscal bill that will grow Nigeria’s economy and not “shrink it.” He advocated for a willing buyer and a willing seller for gas and government should not be involved in business but in regulation while the private sector should drive the process of business.

NGA he said will continue its process of promoting gas business in Nigeria and it will continue to engage stakeholders, stating that Its two major objectives are advocacy which has to do with getting right policies and promoting investment in gas business in Nigeria,

“we have been engaging and we will continue to engage.” Dada said, NGA is the natural voice of gas in Nigeria and enjoins the incoming executive to consolidate the association’s primary position of being the only voice.

Olusola Bello