Time to tweak FG’s policy to attract needed gas projects investments
Over time, the clamour by operators and industry experts on the need for successive governments to address the issues around credible and enforceable gas contracts continues to mount.
Those concerns equally opine that if the current price regime as it pertains to gas are not tackled, the Federal Government should forget the idea of attracting willing local investors to invest into production of gas for local use.
Industry close watchers observe that gas projects will become more profitable if indigenous companies are given access, stressing that it will be easier for local companies with proven track records to attract investors to execute projects that can unlock gas for Nigeria.
Those who know in the gas sector insist that if government does not address pressing issues bedeviling gas sector in the country currently, there will not be one penny investment in gas infrastructure, in gas development, in gas projects in Nigeria in the foreseeable future
To them, “if government does not address this investment and income currency mis-match, there will be no future investment in gas project in Nigeria, there will be no more addition to power therefore Nigeria economy cannot grow.
They maintain that the infrastructure distributing gas around the country is poor and there need to be 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
From all indication, Nigeria remains very strong in terms of gas production as production has not dropped by any significant margin since the global crude oil price drop started.
Industry analysts are of the view that Nigeria’s gas development in the medium term could derive much from local demands as from export, if not in volume but in value.
They are optimistic that the quantum value gain from the combine price increase and the demand from the power and industrial sector will outstrip LNG which will remain constrained by new supplies into the global market from unconventional gas.
While it is not difficult to decipher that utilisation of gas has assumed a new dimension for both economic and technological development this is even made manifest in business decisions as industries especially are seriously embracing gas as alternative source of energy generation with the recent shortfall in electricity.
Industry close watchers acknowledge that the present government is doing a great job in prioritizing power generation in Nigeria and utilising domestic natural gas.
The key policy intervention that they believe would be a game changer would be to reduce the retail price of gas to industry to a competitive level, which in my view would foster significant industrial growth.
Analysts believe that achieving the desire result in local gas supply or the lack of it will remain a very sensitive issue with government involvement in unrealistic prices.
They insist that to achieve the local gas demand projection, the domestic market must be made attractive to investors who need to invest huge capital upfront in gas processing and pipeline for distribution.
KELECHI EWUZIE