Thursday, June 27, 2019
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The Nigerian Gas Association (NGA) has continued to be the most influential organization in the gas space effectively advancing the role of gas in the Nigerian oil and gas sector. Giving all the dynamics in the world energy platform due to rapid changes, the association needs an advisory council that will project its cause globally and locally. The job of the Advisory Council and Board is to play advisory role which will put a position paper that will be tabled to policy makers, legislators and the wider industry. The gas association inaugurated its advisory board members, the composition of the board is made up of perfect and seasoned professionals who have contributed significantly to gas sector in Nigeria.  The Forum was attended by Chief Executives of International Oil Companies (IOCs), Independent and downstream companies including chairmen of associations in the oil industry.

In his welcome address, the NGA president who doubles as the Managing Director of Frontier Oil Limited, Engineer Dada Thomas, made it known that gas is the future for Nigeria and will be one of the keys for unlocking a better future for the country. According to Dada, “In the NGA, we believe that gas equals power, equals economic diversification”. It is a simple equation, “conversely, no gas equals to no power, equals to no economic diversification.” Nigeria with the population of 186 million people growing at 2.7% per anum projected to reach and be the third largest population by 2035. Dada asked how will these population be fed, clothed, housed, energized, if the country does not diversify its economy? Gas is the basis for diversification of the country’s economy. He stated clearly that the NGA is an organization that was formed in 1999 by the Nigerian National Petroleum Corporation (NNPC) by its pioneer chairman Dr. Gaius Obaseki, Chevron and NLNG which is one of the strongest supporter of the association. Others include Shell and ExxonMobil that were part of the founding fathers of the association.

The NGA president revealed that the association has grown with more than a 100 corporate members from the IOCs to LPG retailers. The gas value chain is vast and grows from the upstream, the midstream to the downstream. It is not a political association but a profit organization, it represents systemic issues because it projects the good and development of gas. The Frontier boss stated further that the association has four core values that it tries to progress and the two most important ones have to do with advocacy and promoting investment in gas through best practices in health safety and environment by providing a window of being a resource centre. Advocacy makes the gas association to engage with policy and law makers so that whatever is being codified into policy and law is good for the gas industry. The association is promoting investments in the gas sector. The NGA helmsman posited that the association has numerous achievements to its credit, it has engaged the authorities on inimical monetary policies which are not palatable for the gas sector. Gas investment is made in the US dollars but from 2015 gas operators get paid dominated in naira at the Central Bank rate causing a lot of issues for operators. Dada explained that operators are losing N60 for every dollar gas sales made, “which is not a sustainable business model.” The association has been engaging with the Ministry of Petroleum Resources and it made substantial input into the approved oil and gas policy, with petroleum fiscal policy which will be approved by the Federal Executive Council (FEC). This helps to narrow the gap between operators and policy makers. He assured members that NGA will continue to engage with the National Assembly to ensure that the PIB will be a good document “that will grow the Nigerian pipe, not shrink the Nigerian pipe”. Dada spoke about the international gas conference which is being hosted by the International Gas Union (IGU) in Washington and the NGA will show case Nigerian gas story in that forum. The participation is necessary because there are good stories to tell about the Nigerian gas space for the world to know that the country is an investment destination for gas.

Former president of NGA, Bolaji Osunsanya, noted that “If gas is going to play the role that we aspire it plays in Nigeria, then whatever we are trying to do is beyond the capacity of the council alone”. He emphasized further that “If the aspiration for the industry is what we see then we need sensibly more horse power in the thinking and programming for this association”. Even though the council may be competent with seasoned professionals, they need other powers to join hands with them to develop the gas industry. He opined that the Advisory Board members are eminent people who understand the dynamics of the industry and will advance the course of the gas association. He made it known that every aspect of the industry is represented in the composition of the council and board which will guide it going forward.

As part of his commitment to gas development, Dr. Maikanti Baru, Group Managing Director (GMD) of NNPC is the Chairman of the Advisory Board of NGA. In his key note address, Baru appreciated the Executive Committee and the entire members of NGA for the honour bestowed upon him and the other members as pioneers of the association’s Advisory Board. The NNPC boss described the inauguration as an “auspicious event which will prove to be a milestone in the history of the association, it is a visionary step, steady and consistent effort in gas development for economic growth”. He pointed out that the NGA has in deed contributed immensely in the Nigerian gas sector through series of events by providing a forum where members and active players of public and private organizations within and outside Nigeria, government agencies discuss matters relating to the development of Nigerian gas sector.

Baru stated that the establishment of an Advisory Board, for the association will provide further indept, expert guidance to the NGA Executive Council, regarding various opportunities and challenges that will provide key observations to significantly grow Nigerian gas industry. The federal government through NNPC has mandated gas development to stimulate unprecedented economic growth. Gas infrastructural development to enhance gas supply is a critical focus area for the government from 2016 to 2019 mid ways for the oil and gas industry as well as key business focus areas to grow the industry. The GMD added that with vast oil and gas experience entrenched in the gas Advisory Board, “I as the pioneer chairman of NGA advisory board, will focus development, I hereby dedicate myself, to the aggressive development of the Nigerian gas sector and commit myself and all the members of Advisory Board to do everything possible to achieve the objectives of the board which aligns perfectly with NNPC’s key business focus areas”.

Besides, there are opportunities in various sectors of the industry. For instance, in the upstream gas development, acquisition and operatorship of oil blocs, drilling rig leasing and drilling related services, engineering services, heavy equipment leasing, seismic, EPC contracting, steel rolls, banking and financial services among others. Similarly, in the midstream of the industry, there are investments such as: gas processing facilities, NLNG gas storage, EPC of over 2000 kilometres of gas pipelines, fabrication of pipes, NLG fabrication, provision of pipe transportation and laying equipment, selection of gas network through scanner system including numerous opportunities for operators. In the downstream sector, there are opportunities for investment for LPG marketing, investment in gas based industries through fertilizer and methanol, petrochemicals and CNG stations. Baru asserted that there are more opportunities in manufacturing of LPG gas cylinders and accessories, financial services among others. Therefore, the potentials for gas are enormous.

However, there are key challenges in the sector which include incessant gas and crude oil pipeline vandalism, poor payment performance of gas by the power sector, these continue to challenge the growth of sector. The NGA Advisory Board chairman, noted that funding of the gas sector is also a challenge to meet up with capacity for financial institution in-country. There were interventions despite the challenges, good progress is being made in realizing strategic aspirations for gas and efforts have been put in place to address pipeline vandalism with series of engagement and re-orientation of the host communities to employ new technologies. These technologies include horizontal directional drilling services, pipeline surveillance technology and upgrading critical existing infrastructures. In addition, the government has deployed scanner systems to assist in monitoring and control accomplished works with greater feasibility of disbursed network of pipelines. The government has been engaging with the power sector regularly on the need for payment of the mounting gas debts so as to give suppliers confidence in the sector.

On funding of oil and gas development projects, the government has raised about $4 billion to finance cash call. In these efforts, operators might come across various projects, joint ventures and gas pipelines. Baru pointed out that the Nigerian gas sector remains the largest and most vibrant in Sub-Saharan Africa with lots of potentials especially in the deep water and untapped gas resources. The sector offers unique opportunities for investments in upstream, gas development, midstream, distribution and marketing of gas. The gas reform is anchored on a robust strategic framework that is focused on maximum economic impact through gas. It aims to strengthens linkages with agriculture, manufacturing and disperse through small enterprises enhanced with power

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