Derefaka explains launch of the National Gas Transportation Network Code
Technical Adviser (TA) to the Minister of State, Petroleum Resources on Gas Business & Policy Implementation, Mr Justice Derefaka has provided additional insights to the launch of the National Gas Transportation Network Code on Monday, saying the scheme remains key to the ongoing 2020: Nigeria Year of Gas Revolution.
Recall that the unveiling of the code by the Federal Ministry of Petroleum Resources (FMPR) was part of the opening ceremony of the ongoing 3rd edition of Nigeria International Petroleum Summit (NIPS 2020) taking place at the International Conference Centre (ICC) Abuja.
In an exclusive chat with Business Hilights, Derefaka, who doubles as the Program manager, Nigerian Gas Flare Commercialization Programme of the Federal Government under the same Ministry, “First, I want to say this is the best new year gift to the gas sector and indeed the international investor community even as the Honorable Minister of State, Petroleum Resources, H.E Chief Timipre Sylva has towards the end of last year declared this year 2020 as the ‘Year of Gas’.
“As you may recall, the key strategies of the National Gas Policy (approved by the Federal Executive Council in 2017) are 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.
“Additionally, the Nigerian Gas Master Plan, the National Gas Supply & Pricing Regulation 2008 (Which will soon under review), and the National Gas Policy 2017 all recommend the introduction of the Nigerian Gas Transportation Network Code (“NGTNC” or “Network Code”).
“The Network Code is a gas market liberalization enabler aimed at ensuring gas pipeline integrity, open access to pipeline and common understanding on metering with a set of rules and protocols designed to govern the operations of gas network players in a way that impacts the gas market as part of efforts towards transparency and efficiency in the operation of pipelines in the country. The code will ensure transparency in the industry, guarantee fair and non-discriminatory access to gas transportation network, attract foreign investors, help to ensure that wrong gas does not go into the pipeline and ensure growth and development in the Nigerian Gas Industry.
“This Network Code aims to harmonize gas balancing arrangements to support the completion and functioning of Nigerian gas market, the security of supply and appropriate access to the relevant information, in order to facilitate trade and tomove forward towards greater market integration.
Derefaka averred that “The Network Code will also enable new ways of doing business in the Nigerian domestic gas market. And 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.
Note also that the Gas network code has been long overdue and the whole industry has anticipated the Network Code and expect to see it come on stream soon.
“And from an investor perspective, it assures that when they invest, their gas will be operated in best practices and help in boosting the confidence of international financiers because they are always concerned about things being done properly. It will also provide them with an idea of how serious the government wants to drive the gas sector forward especially in line with HMoSPR’s declaration of the year 2020 as the “Year of Gas”.
Derefaka added that “As part of regulatory and operational mechanism, the Network Code has other ancillary agreements and Licenses to be issued to the users of the Code. These include amongst others, Supplier, Operator (or Transporter), Shipper and Agents Licenses Framework/Accession Agreement, Network Entry/Exit (Interconnection) Agreements and Operational Balancing Agreement (OBA).
“There are also Business Process Documents including Capacity Registration Form, Capacity Transfer Notice, Nomination Forms (Rolling Annual Estimates, Weekly Estimates, Daily Notice, Trade Nomination, Re-nomination), Curtailment Notice, Invoice, Invoice Remittance Advice, Maintenance Notification Form, Imbalance Form in place for effective operations and functioning of the code
According to him, “In a nutshell, the network code system will play a vital role in ensuring that it delivers the energy that is the lifeblood of our economy, keeping our lights on, our homes warm and our businesses running.”
“Remember also that the launch of the Network code will open up ‘New developments in the gas supply chain’. This is premised on our consideration for new developments in the use of gas.
“These include: (i) the intensification of gas use in the transportation sector (in both liquefied (LNG) and compressed natural gas (CNG) forms); (ii) LPG for cooking and reduce deforestation and small-scale applications of LNG and CNG, including alternative means of distribution such as virtual pipelines; and, (iii) pioneering technologies that facilitate the storage of electricity in the form of hydrogen or synthetic gas (“power to gas” or P2G).
“As a Government, it is important that we facilitate the emergence of these new uses of gas through appropriate interventions which is why the Hon Minister of State recently inaugurated the National Gas Expansion Programme (NGEP), stating that the country is on the verge of becoming a gas hub for the African subregion. And need to make the industry relevant to the people by touching the lives of the ordinary citizens through equitable distribution of petroleum products in the country, adding that the team would serve as a catalyst for the development and utilization of available assets whilst adhering strictly to the National Gas Policy as gazetted and reform and implement a market infrastructure strategy to promote cost-effective distribution.
“That said, I believe the Network Code, can assist us as a nation to realize our potential and reap the vast benefits of a secure, fully implemented internal gas market for all its citizens,” he averred.