A Review of the Nigerian Energy Industry

NNPC says domestic gas supply will increase by 250m SCF

Oando's 128 Km gas-pipeline07 May 2014, Houston Texas — The Group Managing Director, GMD, Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu, has promised that domestic gas supply will increase by 250 million standard cubic feet, SCF, before year end.

If it happens, the constant agitation by Nigerians on account of lack of access to gas for domestic use, particularly for power, may be a thing of the past.

Yakubu told journalists on the sidelines of the ongoing Offshore Technology Conference, OTC, in Houston, Texas, that domestic gas supply is an essential ingredient in the Federal Government’s gas-to-power project.

He said: “Today, NNPC is the largest producer of gas for domestic use. We produce over 400 million SCF, and as we speak plans are underway to jack it up to 250 million SCF by the end of the year.

“There is a lot that is going on in terms of gas investment, particularly gas-to-power investment, which is a key component of the Federal Government’s agenda.”

The GMD also said that gas production in the last three years has been on the increase despite the challenges faced in the sector.

Yakubu said: “Within the current physical regime, we have been able to move from 300 million SCF to 500 million SCF. This, by any global standard, is impressive.
We also intend to continue to build on that.”

He also explained that one of the major challenges of domestic gas supply was the commercial framework.

He said: “Gas investment is capital intensive. Commercial framework has been put in place and gas price is one major factor in the process today, because gas investment is demand driven.“

We have a good framework now than what we had before. Are we there yet? No, we are not there yet. We are working with the relevant agencies to ensure that the right environment is there.”

Recall that power operators continually complain of gas shortages to feed their plants, thereby resulting in the very poor electricity supply that Nigerians have faced in the recent time.”

Multinational gas suppliers have used the excuses of unfair pricing and constant pipeline vandalism as major obstacles to sustainable gas supply for gas to power.As regards the low level of foreign direct investment in the oil and gas sector due to the non-passage of the Petroleum Industry Bill, PIB, the NNPC helmsman said that before the bill, there were some enabling laws governing the industry, which have made it possible for the sustenance of the sector.He said: “Before the PIB, there were quite some enabling laws governing the industry and within the provisions of these laws, we have been able to acquire this.“The essence of the PIB is to further enhance and create a better environment for investments. It is certainly going to add value when it comes, but before it comes, we have to make do with what we have.” – See more at: http://www.vanguardngr.com/2014/05/nnpc-says-domestic-gas-supply-ill-increase-250m-scf/#sthash.BTSGRC4S.dpuf

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