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Gas Development Impossible Without Appropriate Pricing, Says NNPC

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The Nigerian National Petroleum Company (NNPC) Limited yesterday maintained that without the right pricing for natural gas, it would be impossible to develop the sector.

Speaking on the third day of the Practical Nigerian Content (PNC) Conference in Bayelsa, organised by the Nigerian Content Development and Monitoring Board (NCDMB), Group Executive Director, Gas and Power, NNPC, Abdulkabir Ahmed, also called for appropriate pricing for electricity to attract investment. He said to ensure cleaner energy sources, Nigeria had to refocus its energy mix, deepen the usage of gas, and draw funding into the sector.

Ahmed spoke on the same panel that had Managing Director/Chief Executive Officer, Gas Aggregation Company of Nigeria (GACN), Olalekan Ogunleye; Managing Director, Shell Nigeria Gas, Ed Ubong; Managing Director/Chief Executive Officer, ND Western, Eberechukwu Oji; and Director, Services and Offshore, Oilfield Equipment, Baker Hughes, Stephen Adeyemo.

The top NNPC official stated that funding was a big challenge in the oil and gas industry, advising that the sector should leverage on technology and experience to weather the shortage of projects financing.

Ahmed stated, “Today, funding for fossil fuels is generally low and, therefore, it poses a lot of challenge. However, we cannot do without investment in this sphere. Therefore, we need to leverage on technology, leverage on industry experience, so as to produce more with less cost.

“The second area that we look at is gas and power. Now, gas and power work together, because the power is fuelled by gas. So, in as much as you’re looking at your opportunity, we have to look at where the gas will come from, who provides the gas?

“Where do we also get the gas for use? Do we have adequate infrastructure to move the gas around, to utilise the gas for what is useful as well as put up adequate skills to ensure that we boost production, transmission and transportation?

“All these are not obtainable except we have a transparent and market-driven gas market as well as electricity pricing. Without that, it will be difficult to go back to the upstream and put in money if you have no feasibility about upstream costs.”

He noted that power generation was dependent on gas, especially for heavy duty industries, stressing that efforts are on to bring in vehicles that would run on gas as well as the skills to improve domestic gas production.

Ahmed called for regional and international cooperation in the areas of gas production, transportation, and utilisation, especially for power generation.

He said, “We need to develop an appropriate gas pricing as well as policies and investment packages. The Petroleum Industry Act (PIA) has done some significant improvement on some of the existing laws on gas.

“It has opened up some bottlenecks that used to exist. Therefore, there are now several opportunities. Moreover, you have a lot of areas for investors to come in and put their money. They can look at auto vehicles, power plants can come, heavy industries, petrochemicals, fertilisers etc.”

In his remarks, Ogunleye stated that most of the gas production in the country was under the control of foreigners, stressing that the situation is worrying.

He said, “You will find that the majority of gas projects and events are driven by foreign nationals and it is a concerning situation. And so, we need this task of continuously engaging with the public to expose them to the opportunities.

“Government has been pushing for gas development and the necessary environment has been created, whether through the PIA, the Decade of Gas, autogas, etc. All these are creating a spectrum of new opportunities around commercial opportunities. There are multiple opportunities even for small companies.

“If you go downstream, you’ve got a bunch of new opportunities and new technologies. So, all across the spectrum, there are opportunities. The question is, how do we maximise and take advantage of these opportunities.”

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