‘Strategic intervention in gas utilisation end, solution to demand shortfall’
Oil and gas Industry operators said that unless urgent steps are taken to grow the utilisation end of the gas industry, Nigeria should forget any aspiration to close the estimated 4.7Bcfd gas demand shortfall anytime soon.
They observe that the economy is currently largely dependent on thermal power plants which are fuelled by gas adding that to get the power sector right, we need to address issues around sustainability of gas investments and gas availability.
Industry watchers called on the managers of the economy to urgently address the lapses in gas infrastructure, funding and debilitating effect of vandalism in the energy sector and resolve hiccups that gas shortage poses as this will encourage investment to grow the economy.
According to them, “A step into closing the gas demand shortfall should start with the introduction of the domestic gas obligation which imposes an obligation on the oil companies to assign certain percentage of the gas being produced for domestic uses.
“Looking at what is going on in the industry, the future is selling our gas domestically because the international prices are in decline”. They said.
Isreal Aye, Director, Aspen Energy Nigeria Group observe that the over centralisation of power generation or regulation of power is part of the problem we have in Nigeria adding that Nigeria does not need to generate the bulk of her energy needed to power this her economy from gas sources alone.
Aye opines that the challenge of power in Nigeria currently is that the technology required for the sector to function optimally is not available, saying that the fuel sources whether it is coal, solar or gas are abundantly available in Nigeria, just that the ability to convert these resources efficiently into power is lacking.
According to him, “The problem is not generation; it is an issue of investment. This can be trace to legislature. The sector was entirely locked in with legislation. Hopefully it is opening up now and we hope it opens up more so that money can find its way in so we can see more investment”.
“Nigeria needs to take immediate steps to open up to foreign investment; tackle issue around government monopolies in infrastructure; remove all obstacles to smooth business operations as this will make attract both local and foreign investments”. He said.
He advocated that State take the lead in the pursued of embedded power. “Each state should be allowed to lean on the resources readily available to them to generate their own power. They should backed by legislation to manage the generation and distribution of power within their locality”. He said.
Aye further disclosed that PIB should be passed and there is the need to invest in gas processing plants observing that there are frank conversations in terms of fiscal terms that would incentivize investors.
He sounded a note of warning to managers of the economy saying while making progress in the investment end, there is urgent need to look at intervention at the utilisation end particularly with respect to power.
Analysts are of the opinion that that the country is endowed with abundant gas resources and the sector holds huge potentials for unprecedented growth, they are however concerned that the existing legal and regulatory framework, written primarily for oil does not provide robust technical and commercial framework for gas.
They further insist that the gas sector policies will provide Nigeria with the opportunity to harness and get maximum value from its stranded gas resources and also vigorously pursue investment at the utilisation end.
KELECHI EWUZIE