PIA: Good Collaboration Will Achieve Robust, Competitive, Transparent, And Profitable Oil And Gas Industry Says NDMPRA
Nigeria Midstream And Downstream Regulatory Authority ,Chief Executive Officer , Engr.Farouk Ahmed has assured that good implementation of the PIA 2021 through quality collaboration will achieve a robust, competitive, transparent, and profitable Oil and Gas industry
This he also stated that Nigerian Government is following an energy transition pathway that considers and combines sustainability, technology, investments, business strategies, and policy.
The Authority CEO who was represented by the Executive Director, Economic Regulations and Strategic Planning ,Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA),Dr. Zainab Gobir stated this while delivering a special industry address at the just concluded Association of Energy Correspondents of Nigeria (NAEC) Strategic International Conference in Lagos with the theme “Energy Transition, PIA, Petroleum Pricing and the Way Forward for the Downstream Sector”
According to him ‘’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.
Fossil Fuels to remain relevant
He maintained that fossil fuels will remain relevant in the energy mix despite ongoing global energy transition campaigns.
The authority as a regulator according to him is fostering a conducive environment through: Enabling regulations, incentives, and private sector participation.
Ahmed stated that development of the PIA 2021 mandated Distribution Code which include collaboration with relevant stakeholders on pricing frameworks, positioning the Authority as a credible data source with reliable visibility and stimulating the domestic market.
“The agency is involved in the development of a cost benchmarking framework for Midstream projects and operations, establishment and engagement in strategic discussions for the provision of a gas trading Exchange platform; and affordable low-pressure natural gas (LPNG) cooking gas in line with the National Gas Expansion Program (NGEP)”, he noted.
“So also 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. 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 liberalization”, he added
The Petroleum Industry Act 2021
“The Petroleum Industry Act 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”, he stressed.
A few of the enablers of the PIA 2021 according to him include: 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. 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 the Host Community Trust Fund, Environmental Remediation Fund, and the Decommissioning and Abandonment Fund.
The Decade of Gas in Nigeria
He listed some of the initiatives Nigeria has taken to facilitate a shift to a gas-based economy include the Declaration of the Decade of Gas, to foster economic growth and industrialisation driven by gas. This he said will improve energy access, increase domestic consumption, and provide an alternative energy source.
“The National Gas Expansion Programme for the penetration and utilisation of LPG, CNG and DLNG (Domestic LNG). 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”, stated the Ahmed.
The current energy transition according to him is a pathway toward transforming the global energy sector from fossil to renewable fuels by the second half of this century.
“At its heart is the need to reduce energy-related carbon emissions to limit climate change. 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%”.
