Why Nigeria must align future gas projects investment with production’
Considering the recent upscale in gas production recorded by Nigeria as a result of aggressive involvement of indigenous players, Operators and industry players have advocated for more investment incentive by government to further boost production.
Industry close watchers observed that Gas production has become a major focus for oil companies in response to strong investment in gas-to-power projects across the country.
According to them, “Although gas output has increased, issues like infrastructural constraints continue to prevent indigenous companies from ramping up gas output significantly.
It is observed that with Nigeria still West Africa’s largest gas producer, with an estimated output of over 2.5tr cubic feet per year, indigenous investors will require additional investment in gas processing and transporting infrastructure if they are to increase output significantly.
Funding of gas projects remains a major challenge in Nigeria, owing to the poor commercial terms for domestic gas suppliers. Despite huge demand for power and the presence of huge gas reserves offshore, governments have been hesitant to change electricity tariff regimes said Wumi Iledare, an energy expert.
This has prevented cost reflective gas prices for power, slowed progress with gas-to-power projects and stalled the creation of a viable gas market.
The underlying theme of Nigeria’s future gas development is the monetisation of the underutilised resource base through export, and more importantly, for domestic use.
Ibe Kachikwu, Minister of State for Petroleum resources have consistently assured that part of
The Federal government has consistently assured that parts of it plans for gas sector is to ensure downstream gas infrastructure development that could include power generation and/or industrial development.
At different occasions Ibe Kachikwu, Minister of State for Petroleum resources has continued to maintain that efforts are been made to increase local content using gas development as a broader prime mover.
Nigeria as the largest gas producer in the whole of West Africa , could focus on the optimal development of domestic gas supplies, leverage stronger local content requirements for all future gas development.
Ayodele Oni, an energy expert had observed that if government does not address the challenges gas investors are facing, there will be no future investment in gas project in Nigeria, there will be no more addition power therefore Nigeria economy cannot grow.
The infrastructure distributing gas around the country is poor and there Is need to encourage a public private partnership in growing this infrastructure because the molecule of gas are over there in the Niger delta while the largest consumer of gas are in the south west and you have to connect the two.
Government should make it attractive for investors to bring their money which has choice of where to go in the world to come to your jurisdiction, stay there and create wealth and grow.
Kelechi Ewuzie