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FG moves to boost gas supply to domestic market

By BusinessNews Staff on May 29, 2014

The federal government is planning to construct the longest pipeline in the country from Calabar via Ajaokuta to Kano State, as part of efforts to ensure adequate supply of gas to meet the growing market demand for the product.
The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, disclosed this while delivering a paper titled: “Encouraging Investment in Gas Production, Supply and Consumption” at a three-day National Conference on Gas Resources organised by the Senate Committee on Gas Resources in Abuja.

“By the end of the year, we will be commencing, via public private partnership (PPP) scheme, the nation’s longest pipeline from Calabar via Ajaokuta to Kano State,” a statement yesterday by the Group General Manager of the Nigerian National Petroleum Corporation (NNPC), Mr. Ohi Alegbe, quoted Alison-Madueke to have said.
Represented by NNPC’s Group Managing Director of the corporation, Mr. Andrew Yakubu, the minister said the construction of the strategic East-west pipeline was progressing while the Lagos end segment of the Escravos to Lagos Pipelines System (ELPS) was nearing completion.

She explained that almost 500km of new gas pipelines had been completed and inaugurated including the doubling of the capacity of the EPLS between Escravos and Oben and the extension from Oben to Geregu and River Imo to Alaoji respectively.

She said by the end of 2018, the backbone pipeline infrastructure for gas would have been delivered, concluding an initial phase of over 2500km of gas pipeline infrastructure development.

According to the minister, government was strategising to leverage on the full potential of gas to achieve massive impact on the economy and the national Gross Domestic Product (GDP).

“We are focused on jumpstarting gas supply to enable usage in gas to power, gas based industrialisation, compressed natural gas for transportation and commercial usage, cooking gas for domestic usage and regional pipeline for gas export,” she added.

She stated that for government to support the aggressive short-term demand growth in the power sector, a domestic gas supply obligation regulation which mandates a certain amount of gas supply for the domestic market pending the full maturation of the market was introduced.

While expressing the hope that the market will ultimately drive itself for supply growth, Alison-Madueke stated that the long run expectation is for less dependence on supply via obligation.

In order to boost investor confidence in natural gas in the country, she said government had reviewed the contractual framework for gas through the development of world-class standardised gas supply agreements in addition to Network Code which governs the flow of gas across the nation’s pipeline network and provides rules for open access.
She said the use of natural gas instead of petrol had translated into significant savings for over 4,000 taxi drivers in Benin City who are already using this alternative energy source.

The minister also said federal government’s efforts at eliminating gas flaring had recorded tremendous success as flare out rate has dropped to 11 per cent.

“Many of the International Oil Companies (IOCs) are fast approaching full flare out as the gas obligation and infrastructure growth have all combined to enable utilization of hitherto flared gas,” Alison-Madueke stated.
She finally called on all stakeholders to direct more effort towards full market liberalisation and address the very urgent challenge of increasing supply to the power sector.

The GMD however put the country’s current gas production at about 8.5 billion cubic feet per day (bcf/d).
He explained that of the total production, 3.5bcf/d (41 per cent) is exported, 2.3 bcf/d (28 per cent) is consumed domestically for power and industries, 1.2 bcf/d (15 per cent) was used in the upstream for gas re-injection and balance of 0.8bcf/d (10 per cent) is flared.

In her welcome address, the Chairman Senate Committee on Gas Resources, Senator Nkechi Nwaogu, said Nigeria with per capita consumption of natural gas put at about 1.06kg, ranks lowest in Africa with only five per cent of her citizens having access to domestic gas.

She explained that the aim of the conference w as to look at ways of filling the huge gap between gas production and utilisation in the country as well as reducing routine gas flaring for the benefit of the nation and its citizens.

[This Day]

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