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Experts canvass gas master plan review, licensing round

August 18, 2015 : ’Femi Asu 1 Comment

   

 

Gas pipelines
| credits: sweetcrudereports.com

The Nigerian Gas Master Plan, which came on stream seven years ago, should be amended and licensing round should be carried out to expand access to gas reserves for development, industry operators and experts have said.

The NGMP, which was approved in February 2008, was designed to optimise the vast gas resources in the country, with key strategies being to stimulate the multiplier effect of gas in the domestic economy; position Nigeria competitively in high-value export markets, and guarantee long-term energy security in the country.

But the country’s gas reserves of over 186 trillion cubic feet remain largely untapped, with several power plants in the country stranded for lack of gas supply.

The Project Director for the Uquo gas field development, a joint venture project by Frontier Oil Limited and Seven Energy, Alhaji Abdullahi Bukar, in an interview with our correspondent, said the gas master plan had served its purpose of kick-starting the conversation.

“But we should revise it to be able to address what we see now and whatever new policy we would like to bring on stream so that we can move on with gas”

According to Bukar, who believes gas is the most important thing for developing the Nigerian economy, there are people who are willing to invest in gas, but they have no access to reserves.

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“There has been no licensing round that has been consummated since 2007. So when the willing buyer, willing seller concept is being put forward, people are willing to come and talk, but they have no access to reserves. All the known gas is either in fields that are owned by somebody who is waiting for some other things in order to develop them or they are stranded,” he said.

Some industry stakeholders have suggested dedicated licensing round for gas fields to ramp up gas development in the country.

The Vice-President and Head of Energy and Natural Resources, FBN Capital Limited, Rolake Akinkugbe, said, “There may be some merit in the idea, given the gas requirement in the power sector and across other industries. However, one challenge I see is how the government would deal with associated gas, since many hydrocarbons fields in Nigeria have reserves of both oil and gas.

She said the complexities of having a dedicated licensing round for gas fields would require a lot of serious thinking, as associated gas accounts for close to 80 per cent of Nigeria’s total gas production.

“For now, it might be better to strengthen and refine the current licensing round for both hydrocarbons, so that policies that incentivise gas production are extended. Many companies that own licenses for associated fields would ideally develop both commodities, but gas monetisation comes with the added considerations on infrastructure, funding, off-take, and above all regulation.”

Tackling those areas may be more sensible than having dedicated gas licensing rounds, Akinkugbe said.