Trinidad and Tobago holds lessons for Nigeria in gas reforms
Rapid growth in its natural gas production coupled with substantial exports of petrochemicals have earned Trinidad and Tobago economic successes as well as huge accolades, which experts now urge Nigeria to learn from.
Being the wealthiest country in the Caribbean, the Trinidad’s earnings through the energy sector constitute a large percentage of its total GDP, government revenues and foreign exchange.
Although Trinidad and Tobago has been heavily reliant on energy-based revenues, they have also implemented initiatives to diversify their economy, with recorded successes.
Analysing lessons from the Trinidad and Tobago, Thomas Dada, president of Nigeria Gas Association, said the country went through an evolutionary process in a consistent, transparent manner.
“They first used gas to generate power, then set up special commissions, groups and task forces that guided them and helped them to go beyond power to manufacturing and to rail industries.
“They have a Port Industrial complex called PointLissas. In the Point Lissas, they have eleven Ammonia plants, that is eleven fertilizer plants and seven ethanol plants in one complex,” Dada said.
“How can Trinidad, not bigger than Surulere, have 18 petrochemical companies in one place, and Nigeria have only Notore and Indorama.
“Notore has been there since 1980s, which is just one, until Indorama just followed suit. Pakistan built also in 80s and now has 14 companies in gas.”
On the other hand, Nigeria, with the ninth highest largest gas reserves in the world and proven gas reserves of 188 trillion cubic feet (tcf) is experiencing a full-blown energy crisis in spite of these huge natural resources.
With an intension to dominate the domestic gas market marred by weak infrastructure, Africa’s largest economy faces the challenge of ensuring that its abundant gas resources also impact the local economy.
Experts say that for the gas policy to yield a maximum result, government must ensure the passage of the outstanding Oil and Gas sector bills in the National Assembly to earn investor’s confidence and ensure that Nigeria plays a leading role in both domestic and international gas market.
“While we are delaying, other countries are moving from policy to law to implementation. The Ghanaians and even Equatorial-Guinea are moving faster than us in oil and gas, and are monetizing them fast. They are taking the length of time we are taking in making decisions that would win investor’s confidence,” Dada said, speaking further on the cost of policy inconsistencies in Nigeria.
He pointed out that, “Nigeria needs investors and the policy that must attract and win their confidence must be ready. We need over $100 billion worth of investments over the next 10 years, and the question is how can we use these massive natural gas resources to uplift our people and diversify the economy.”
Dada criticised the non-passage of the Petroleum Industry fiscal bill, as well as the administrative and host community bill, which he said weakened the drive to win investors’ confidence in the oil and gas sector.
“The Petroleum Industry fiscal bill is the most important bill for me because if an investor sees that the fiscal of a nation or system is good and that if he takes a risk, he gets good return, he would tolerate all the other inconveniences that come with doing business in that country.”
He urged the legislature to ensure these bills were passed to strengthen the gas policy and to attract more investments into the gas infrastructure that would, in turn, open up investments into the gas sector and the domestic gas market.
“Other countries are going from Policy to Law and to production. All over Africa, countries are discovering oil and gas and they are monetising them fast and they are not taking the length of time we are taking on making simple straightforward decisions we should implement inconsistent fashion, which is what would give investors’ confidence,” he said.
But Maikanti Baru, group managing director, Nigerian National Petroleum Corporation (NNPC), however, assured that the government was advancing efforts in ensuring the domestic gas markets is opened in order to attract more investments into the sector.
“In the last eight years, we have completed and commissioned over 500 km gas pipelines which are now delivering gas to our power plants and industries,” Baru said at the gas event.
According to him, “Some of the completed pipelines include the Oben-Geregu (196km), Escarvos-Warri-Oben (110km), Emuren-Itoki (50km), Itoki-Olurunshogo (31km), Imo River-Alaoji (24km) and Ukanafun-calabar pipelines (128km).”