A Review of the Nigerian Energy Industry

Stakeholders advocate need for strong gas regulator

Gas line.
Gas line.

*Say NIPPS were “designed to fail”

Oscarline Onwuemenyi

17 September 2015, Sweetcrude, Abuja – Stakeholders in the gas sector have highlighted the need to have a strong gas regulator and to also address the bottlenecks currently facing the sector with regards to the adequate supply of gas to power plants such as those built under the National Integrated Power Projects (NIPPs) which are currently almost idle.

Speaking recently at the Discussion Session for Sustainable and Profitable Gas Sector at the Powering Africa Nigeria Summit in
Abuja, former Chairman of the Nigerian Electricity Regulatory Commission ( NERC), Mr. Ransome Owan who is the Group Managing Director on Power for AITEO Group, said time was ripe for a gas regulator in the country to give effective guidelines and directions for gas exploitation and management.

He explained that the gas sector in Nigeria lacks clear-cut policies as gas has always been treated like a subset of the oil industry. This, according to him, is why other sectors that rely heavily on adequate gas production have suffered.

He said, “The Nigerian Bulk Electricity Trading Plc (NBET) cannot sign their Power Purchase Agreements (PPAs) unless they answer these two things: do you have gas and can you evacuate power? And the seller, which is the government, cannot answer the questions”.
Owan added that, “To gasify our economy, we would need to have a sector regulator to set a foundation, the rules and regulation for the market.”

Also speaking at the session, President of the Nigerian Gas Association and CEO of Oando Gas & Power, Mobolaji Osunsanya lamented the defects in the original planning of the National Integrated Power Projects (NIPPs), saying the source of their main energy, gas, was not taken into consideration.

According to him, “The NIPPs were designed to fail. Nobody builds that size and scale of power plants without being sure of dispatch and gas supply. The solution of gas supply risk will be a federal government backed instrument but the IOCs, the gas transporter and other parties must also give assurance of supply within their purview.”

Executive Director, Falcon Petroleum, Audrey Joe-Ezigbo, said a starting point is for the new government to look at the gas regulating agencies and to collapse them.

He said, “Gas is a critical resource in this country, it is the implication of power for any economy. For the agencies that government will retain, the processes should be reviewed. Ultimately, we must get to a point where there is a Ministry of Gas in Nigeria.”

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