FG Attracts $500m to Gas Value Chain Via Network Code

FG Attracts $500m to Gas Value Chain Via Network Code
Director, DPR, Sarki Auwalu

The Department of Petroleum Resources (DPR) has stated that the Nigerian Gas Transportation Network Code (NGTNC) introduced last year to guide open-access transportation of natural gas, has already attracted investment proposals of over $500 million.

According to the Director, DPR, Sarki Auwalu, so far, the Department has received investment proposals for power generation, ammonia for fertilizer, domestic LNG, methanol, virtual gas pipeline systems, new gas hubs and the establishment of Nigeria gas trading exchange.

Through its Nigerian Gas Flare Commercialisation Programme (NGFCP), the DPR noted that plans are ongoing to reduce gas flaring from the current single digits of eight per cent to five per cent in the country.

Auwalu stated this at an interactive session on the first year of operationalising the network code in Nigeria.

In his words, ‘Investors across the various gas value chains are telling us that they need DPR support, they need us to create that enabling environment for opportunities. We are looking at an additional $500 million in just one year since we introduced the code.

‘The request is over 500 mmscf per day and this is just for one year; you can imagine how much investment we would attract if we continue with this.’

He noted that with the gas code, investors’ confidence has been boosted as investors are coming to DPR to create more networks for the distribution of gas in the country.

He noted that the code ensures non-discriminatory access to pipeline systems, guarantees secure, available, reliable and safe gas transmission systems and ensures cost-reflective tariffs for pipeline services.

He also added that the code supports the development of matured gas markets and provides a mechanism for the effective handling of contractual disputes.

Noting that the network code is a key enabler of the Nigeria Gas Master Plan (NGMP), the DPR said the plan would stimulate the multiplier effect of gas in the domestic economy, position Nigeria competitively in high-value export markets while also guaranteeing the long-term energy security of Nigeria.

He stressed that it would also facilitate gas to power, domesticate LPG and CNG and stimulate broad gas-based industrialization.

He said the impact of the network code since the introduction last year, has upgraded gas transmission into the non-discriminatory open access regime, saying that natural gas transmission and distribution in Nigeria shall henceforth be conducted only through the global industry best practice regime of the network code.

The DPR boss stated that the code has also eliminated discriminatory access to gas transportation in the domestic gas market and has also created access to transportation of natural gas from gas supply points to gas demand areas across the entire value chain in Nigeria using standard, fair, transparent and non-discriminatory manner.