12 March 2015, Lagos – Ahead of the passage of the Petroleum Industry Bill, PIB, the Federal Government is set to introduce the Nigerian Gas Transportation Network Code, NGTNC, to streamline the supply and transportation of gas in the domestic market.The initiators of the Network Code, industry regulator, Department of Petroleum Resources, DPR and the Nigerian National Petroleum Corporation, NNPC, said the system will enable new ways of doing business in the Nigerian domestic gas market.
According to the code, every gas meant for domestic use either for power, petrochemical or industrial, will have a single entry and exit point to cut short the sharp practices prevalent in the current supply and distribution system.
Already, the PIB proposes for an Open Access and Third Party Assets that will make it possible for private investors to access existing pipelines network and depots and also build and operate their own pipelines and depots.
Speaking at a Stakeholders’ Forum for the Implementation of the NGTC, yesterday in Lagos, the Director, DPR, Engr. George Osahon, who was represented by the Deputy Director, Gas Monitoring and Regulations, DPR, Mr. Antigha Ekaluo, said the Network Code is a set of rules guiding the use of a gas transportation system.
He explained that the forum is part of the stakeholders’ engagement and awareness programme, imperative for the successful implementation of the Network Code.
He further said that parts of the objectives of the code include providing a level playing field for all the stakeholders. Also to create a transparent system that will give an open access to any gas user or buyer who want to access the system for the purpose of getting gas.
He added, “The code is underlined by major players who are the gas suppliers, the network code operator itself, the shippers who are the users, and the agents who can be the distributors and other affiliations.
“If we are to eliminate cutting of corners and sharp practices from among the distributors, then they should subject themselves to the Network code, because the code is a set of rules and principle that will allow any gas user to use the system and then get the gas as they want.”
Expatiating further, the Group Executive Director, Gas and Pipeline,NNPC, Dr. David Ige represented by the General Manager, Gas Pipelines Infrastructure, Gas & Power, NNPC, Mr. Sam Ndukwe, said the draft NGTNC was developed in consultation with the various gas industry stakeholders in Nigeria.
According to him, “The Network Code provides the contractual framework between transporter and network users with clear regulated terms for open access to gas pipeline network.”
Major aspects of the Network Code focus on the gas sector status – production & utilisation; evolving gas sector; regulatory & commercial framework; implementation timeline; and key challenges and a host of others.
Ndukwe stressed the need for the Network Code to be backed by a regulatory framework in order to ensure full oversight as well as the following:
”Encourages private investment in pipeline transmission infrastructure;
”Promotes transparency of tariff mechanism;
”Encourages equity in the entry and exit rules;
”Promotes competition for pipeline access;
”Encourages growth in capacity to meet emerging demand for gas shipment;
”Promotes future trading of capacities and
”Provides rules for transitioning legacy contracts