Expectation soars as government set to reposition Nigerian Gas sector

In the past couple of years, the federal government have marshaled out strategic approach geared towards repositioning the gas sector. Among the policy directions looked at are the development of a Natural Gas Policy, Legislative Reviews, Fiscal Reforms, and a Gas Master Plan.

By unveiling the Natural Gas Policy, government was out to promote a public-private sector partnership for the orderly and rapid commercialisation of Nigeria’s natural gas resources for the development and diversification of the domestic economy.

A cursory look at the policy also indicated a strategic move aimed at recovering maximum revenue possible from gas utilisation. The Downstream Gas Act addresses the legal, regulatory, institutional and policy constraints to investment in the Nigerian downstream gas sector.

According to the projection of government, the Fiscal reform will deal with the development and legislation of a new fiscal regime for gas projects that is simple and flexible and that will ensure that Nigeria receives an appropriate share of the economic rent generated from the production and utilisation of natural gas resources.

The fiscal system as planned is anchored on the principle of sustainability that will stimulate participation of new players and ensure that government revenues are aligned with expenditure in the sector for broader economic growth.

Ibe Kachikwu, Nigeria’s minister of State for Petroleum resources maintains that under the present administration using the 7 big win mantra, the developed Gas Master Plan is out to provide a framework for Nigeria to maximize value from its gas resources through leveraging the multiplier effect of gas in the domestic economy and optimising Nigeria’s share in the high value export market.

Kachikwu insists that the Gas Master Plan will facilitate timely and cost effective gas capacity additions to meet unprecedented global and domestic gas demand.

Industry operators in their various summations admit that progress has been made in the gas sector in the last few years. Nigeria is growing LNG capacity rapidly.

They observed that gas is being leveraged as the fuel to power Nigeria’s economy. Report shows that new gas fired plants have been constructed and have the capacity to add over 7gigawatts of electricity to the national grid. Consequently, power sector growth is expected to translate into an increase in gas demand.

Industry operators further observed that the fertilizer sector with expected demand of over 1 bcf/d is also targeted as a critical infrastructure sector that will have multiplier effects and positively impact economic growth via the agricultural sector.

According to them more importantly, the gas sector is attracting new players which will increase competition and stimulate more gas supply and utilisation system in Nigeria.

Analysts opine that if the federal government provides the enabling environment that would push through these plans and projections, it will translate into a rapid evolution of the Nigerian gas sector.

To them, “Not only is demand for gas expected to increase, gas flares will also drop with a view to achieving flare out by 2020.

There is the expectation that annual growth rate in Nigeria’s gas demand is expected to generate huge revenue annually.

KELECHI EWUZIE