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FG mulls 4 policy architecture to drive gas-to-power scheme

Considering the volume of gas wastages through vandalism, the Minister of State for petroleum, Dr. Ibe Kachukwu has revealed government intention to develop in less than one month four-pronged policy direction that will tame vandalism and boost gas utilization in the power sector.

Speaking on the need to stop pipeline vandalism, Kachikwu said “I am as passionate as the militants are on issues concerning the Niger Delta. But whatever message they want to convey, they must stop destroying pipelines and use the same level of aggression used to destroy the pipelines to the negotiating table”.

According to him, government is in the process of finalising and gazetting four new policies in the sector before the end of October this year.

The four policies being considered by the government include; National Oil Policy, National Gas Policy, Downstream Policy and Fiscal Reform Policy.

He said “We need to complete these between now and October, but the problem is bureaucracy. So, how do we go to the National Assembly to get the permission for the urgency”.

Though Nigeria has a gas reserve of over 190 Trillion Cubic Feet (TCF) with a proven reserve of 187 TCF, the abysmal generation of less than 4,000 megawatts (MW) of electricity hardly suffices for energy requirements.

But the problem is that as soon as the gas finds its way into the pipelines, the Niger Delta militants would ensure that large portion of it is wasted through vandalism.

Kachikwu said the gas policy, for instance, would “unlock the gas potential; ensure effective development of the Nigerian gas market with adequate and sustainable gas supply to the power and industrial sectors; transit from gas flare penalty regime to flare commercialisation and shift focus from government-built to investor-built infrastructure.

However, whereas Kachukwu is expressing displeasure on the intractable vandalism, Minister of Power, Housing and Works, Mr. Babatunde fashola argued that Nigeria required more than gas alone to bring constant power supply to the country.

According to him, the cost of fixing these vandalised pipelines is enormous and this constitutes a primary threat to the gas-to-power initiative and power generation with obvious implication for the Nigerian economy.

Fashola argued that while there has been emphasis on the need to add more power to the grid, the existing transmission infrastructure is not robust enough to wheel the generated power.This, he added, has resulted in frequent system collapse of the grid and constitutes a disincentive to Gas-To-Power initiative. This singular constraint is hindering the generating plants from operating at optimum capacity.

To him, “Enormous resources are often expended in developing gas fields and the associated transportation infrastructure to deliver gas molecules for power generation. There is a need for guaranteed payment for gas to ensure recovery of capital invested and return on investment. Also, given the poor payment history of the power industry, securitisation of the Gas Sales Agreement payments has been a huge challenge for consummating commercial transactions and achieving financial closure for projects