Experts canvass investment in alternative gas transportation to address supply shortfall
Industry close watchers in the gas to power value chain has said that to tackle the issue of vandalism of the pipeline infrastructure which has over the years challenged gas supply in the country, there is the need to encourage investment in alternative transportation system like virtual gas pipelines infrastructure.
According to experts the lack of a proper commercial structure for gas production especially for domestic use; insufficient gas pipelines and lack of a strong infrastructure backbone remains a subsisting challenge in the Nigeria gas industry.
Maryam Shehu, deputy general manager, gas commercial, Total E & P observe that gas transportation in Nigeria no doubt has challenges with the current pipeline infrastructure which is open to vandalism.
Shehu said that deepening investment in virtual pipelines system could be instrumental to improving gas availability, especially for electric power supply in the country.
She recommended that redefining captive power generation should be open to any investors for the business purpose of selling gas to third party, adding that virtual and captive power infrastructure are done at low cost.
Report indicate that even where the government has sought to make domestic production and use of natural gas profitable and attractive and despite Nigeria’s natural advantage of having large gas reserves, not much gas reaches the locations.
The idea, however, was that gas suppliers who have supplied their DSO quantities could sell excess gas (or non-DSO gas) on a “willing buyer, willing seller basis,” to third party buyers; reflecting such price as may be determined by market forces.
Ayodele Oni, an energy expert observes that the idea of virtual pipelines appear simple but as with most seemingly simple projects, the challenge is typically with implementation and lack of robust consideration of all relevant project dimensions, prior to commencement.
Oni said one way one to attract the needed investment in the virtual pipeline/captive power business is for government to mandate companies which carry on this business to also participate in infrastructural development whilst also receiving tax breaks/ cuts, amongst other fiscal incentives. There could also be a structure that ensures that the LNG trucks only ply the roads at certain periods of the day to reduce the adverse impact on road transportation. This is plausible, because it is not at every point of the day that vehicular traffic is heavy.
“Yet another option which is crucial in connection with this endeavour is transportation by rail. This option is however expensive and time consuming and will therefore require government support at all levels to be successful. It is common place in other more advanced countries like Canada, for example to see petroleum products transported this way”. He said.
Industry analysts observe that irrespective of the role played by the private sector to improve power supply, it is pertinent that the Federal Government of Nigeria and State Governments too, also invest in improvement of road infrastructure. Alternative transportation modes like the cable cars being developed may serve as a plausible means of transporting the LNG or compressed natural gas.
According to them, “Yet another option which is crucial in connection with this endeavour is transportation by rail. This option is however expensive and time consuming and will therefore require government support at all levels to be successful. It is common place in other more advanced countries like Canada, for example to see petroleum products transported this way”.
KELECHI EWUZIE