As gas industry awaits tariff incentives in 2018…

Ibe Kachikwu, the Minister of State for Petroleum Resources has at different fora re-emphased government’s commitment to the gas sector indication that in 2018 the development of gas would take a priority position in its itinerary for the industry.

According to him, “We have our eyes on gas, and have passed the gas policy at the FEC. We just passed the gas commercialisation programme; we are focused very heavily on gas.

Kachikwu insists government is now trying under fiscal policy to provide an incentive enough to be able to produce gas as of right, not gas as associated.

According to him every gas we have in Nigeria today is associated gas, in other words, people go to the upstream numbers and charge the cost of producing the gas to the cost of producing the oil, and so at the end of the day you are basically providing 100 per cent incentives and people would be lazy.”

“The terms and incentives for gas, if not charge to oil production will immediately take off $3-4 off the cost”

The infrastructure needed in the oil and gas sector is in excess of $30 billion, it is not going to ever be done by the government and that is the reality. We need to provide enough fiscal structures, enough tariff incentives for people to come in and invest in these infrastructures,” he added.

To further reassure industry operators, the ministry of petroleum resources says that with gas reserves of 188 trillion cubic feet in Nigeria, plans are on to further deepen this prospect to attract the desired investment.

Gbite Adeniji, Senior Technical Adviser on Upstream and Gas in the ministry of petroleum reiterated Kachikwu’s position by adding that the Federal Government plans to enhance gas and other derivatives to ensure they attract forex rather than continue with a situation where oil is the main source of forex accruals for Nigeria.

Adeniji in explaining the gas component of the Petroleum Industry Roadmap said that the Gas Revolution will focus on establishment of robust infrastructure, gas based industries, Liquefied Natural Gas (LPG) and Compressed Natural Gas (CNG) penetration.

“As the 9th largest gas reserves holder in the world, Nigeria can become a gas-based economy rather than an oil-based economy”, he said.

He further noted the Nigeria gas revolution agenda seeks to introduce a significant boom in the oil and gas industry adding that the ministry is working with Nigerian National Petroleum Corporation (NNPC) group and other stakeholders to ensure that the gas pipeline is completed on schedule.

“We are creating an enabling environment through revised policy and legal framework for commercialising gas flare.

He pointed out that the policy framework covers kerosene substitution programme, cylinder standardisation, pricing and supply framework.

It will be recalled that ahead of the Public Presentation of the Petroleum Industry Roadmap, the Ministry of Petroleum Resources put in place series of social media conversations to engage stakeholders in order to deepen understanding of policies and strategies deploy to make the oil and gas sector effective.

KELECHI EWUZIE