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Sylva consolidating Nigeria’s National Gas Policy—Derefaka

Program Manager, Nigerian Gas Flare Commercialization Programme (NGFCP) and Technical Adviser (TA) – Gas Business & Policy Implementation to the Honourable Minister of State, Petroleum Resources, Justice O. Derefaka, has given more insights on recent activities of the Minister, Chief Timipre Sylva.

In a telephone interview with Business Hilights Abuja Bureau Chief on Monday, he said “You’ll recall the Honourable Minister of State declared this year as ‘the year of gas’ in Nigeria. And so the industry and/or sector wide gas price review committee inaugurated by the Hon Minister goes to show his commitment in line with his declaration even as encapsulated in the National Gas policy and in alignment with his launch of the Nigerian Gas Transportation Network Code at the opening ceremony of the 3rd edition of Nigeria International Petroleum Summit (NIPS 2020) in Abuja on February 10, signalling a commitment to see through his proclamation that 2020 is indeed the year of gas. Note that the gas network code will ensure equitable and transparent access to the Gas transportation and distribution network.

“Just to reiterate on the gas network code, The Nigerian Gas Transportation Network Code will ensure that only the right quality of gas goes through the pipeline network, guarantee pipeline integrity, open access and common understanding of metering.

“The Network Code like I said in February at the NIPS conference was a ‘New Year gift’ by the FG to the Gas sector and it is both critical to growing the domestic gas market and promoting export. The code will also provide a uniform platform in terms of guidelines for agreements between buyers and sellers which will ensure transparency and eliminate existing bottlenecks.

“Another quagmire was in that you need to know is that the absence of this framework has hindered local gas use. The natural gas reserves volume of the operated deep-water acreages in Nigeria is about 21 percent of the country’s total reserves of liquid hydrocarbons according to the DPR data repository. Yet the acreages accounted for about 36.08 percent of Nigeria’s total production as at 2018. The absence of a uniform code for gas transport hinders investments and scares investors.

Continuing, Derefaka averred that “Now investors would have confidence to invest and be assured of best practice in gas transportation and could encourage them to actively look at the domestic gas market. The bulk of Nigeria’s gas production is for exports, this will need to change going forward if Nigeria must become industrialised. That doesn’t mean we won’t export, we sure will and can handle both as we have the capacity to do so.

He added further that “The Network Code could help harmonize gas balancing arrangements to support the completion and the functioning of the Nigerian gas market, the security of supply and appropriate access to the relevant information, in order to facilitate trade and to move forward towards greater market integration.

“Summing up, Potential outcome from the committee would be the development of a gas pricing scheme that would be segmented along the component elements of the gas supply chain i.e. into upstream gas price, mid-stream transportation and downstream distribution tariff.” The Minister’s adviser noted.