NMDPRA says Gas has Penetrated in Nigeria as Energy Transition
Dr. Zainab Gobir, Executive Director of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said current energy transition is a pathway toward transforming the global energy sector from fossil to renewable fuels by the second half of this century.
Dr. Zainab Gobir represented the Authority Chief Executive of NMDRA, Farouk Ahmed, made it known that there is need to reduce energy-related carbon emissions to limit climate change.
Thus, Nigeria has declared gas as its transition fuel to facilitate a cleaner energy utilisation.
The horizon for the gas-led transition is bright. Nigeria has proven gas reserves of 206.53TCF and increasing levels of domestic utilisation. The power sector used to be the primary off taker at 80% utilisation but in recent years, growth in the gas based industry and commercial segments has seen this drop to only 60%.
Dr. Gobir revealed that Nigeria has taken initiatives to facilitate a shift to a gas-based economy by declaration of the decade of gas to foster economic growth and industrialisation driven by gas.
This will improve energy access, increase domestic consumption, and provide an alternative energy source.
Ultimately, the National Gas Expansion Programme for the penetration and utilisation of Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) and Domestic Liquefied Natural Gas (DLNG) are good gestures from the government to improve clean energy in Nigeria.
The Nigerian Gas Flare Commercialisation Programme harnesses gas flare for sustainable and value wealth creation. “This can unlock and generate approximately 2.5GW of power, 600 tonnes of LPG annually, and create 300,000 direct and indirect jobs while eliminating carbon emissions and providing clean energy for 6 million households.”
The Petroleum Industry Act (PIA) 2021 has created outstanding opportunities for Nigeria. The Act has strategically embedded environmental, social, and governance factors in defining the laws that guide industry operations.
The Executive Director acknowledged the enablers of the PIA which gives room for the establishment of the Midstream and Downstream Gas Infrastructure Fund, which will make government equity and risk sharing investments to attract foreign investments and encourage indigenous practice.
It also enables provision of regulatory incentives in terms of tax, rent, royalties and other remittance to the government. Establishment of trusts and funds targeted at host communities and gas infrastructural development, such as Host Community Trust Fund, Environmental Remediation Fund, and the Decommissioning and Abandonment Fund.
NMDPRA as a regulator is fostering a conducive environment enabling regulations, incentives, and private sector participation.
The Authority is collaborating with relevant stakeholders on pricing frameworks, positioning the regulator as a credible data source with reliable visibility and stimulating the domestic market.
Development of a cost benchmarking framework for midstream projects and operations through establishment and engagement in strategic discussions for the provision of a gas trading exchange platform.
This also includes affordable low-pressure natural gas (LPNG) cooking gas in line with the National Gas Expansion Program (NGEP).
The publication of twelve regulations with stakeholders’ engagements on ten of the regulations to fully implement the PIA’s provisions of creating a robust and profitable downstream sector.
Dr. Gobir revealed that the gas pricing, domestic demand and delivery regulation is one of the regulations published and is at its final stage of being gazetted. Gas pricing is being conducted now to protect and mature the strategic sector towards complete liberalisation.
She was of the view that fossil fuels will remain relevant in the energy mix despite ongoing global energy transition campaigns. Federal Government is following an energy transition pathway that considers and combines sustainability, technology, investments, business strategies, and policy.
Thus, the implementation of the PIA 2021, collectively, by the Authority and other key industry players through collaboration, consultations, consistency, compliance, and enforcement, will achieve a robust, competitive, transparent, predictable, and profitable oil and gas industry.
