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New gas price is an incentive to end flaring ,Ezigbo

Nigeria’s effort to harness its gas potentials is yet to yield the desired fruit.Dr Joseph Ezigbo, managing director, Falcon Petroleum Limited, an indigenous internal piping and gas conversion company, speaks on the gas sector.

Ezigbo...The potentials are immense but we need to get our house right

What incentives do you think government should put in place to boost investors confidence in the gas sector?
Ultimately, we are looking at tax holidays, creating a one stop shop where the investors can get all the approvals required for land utilization, and reduce excessive practice of  the industries.

Once that is achieved, the result would be an influx of industries along our pipeline even though the government may not at a point in time get all the taxes it can but the benefits would increase employment in the state, boost production activities which would led to a  reduction in cost of goods. That also would also benefit the state in so many ways apart from generating a lot of taxes from the industries.

As an operator, would you say existing  infrastructure can support massive investment in the sector?
Yes, the existing infrastructure can go a long way but because of these expansions, we are also expanding our infrastructure base.

Our station was initially built to release approximately 8.5 million SCF (Standard Cubic Feet) of gas per day but we have already placed order for a new station with a capacity of 25 million SCF per day and if you add it to the 8.5 we have at the moment, we are looking at something close to about 33.5 million SCF per day. What that means in effect  is that we have greater capacity to service larger number of industries. With the 18 km we are putting along the road which will have several themes to service any area within that Kilometer length, that means that we are in a better position to deal with any customer .How would you react to the new price regime for gas which the government has said is in line with it’s strategic effort to boost power supply nationwide?
It is a beautiful thing but let me add a word of clarification because when government says we are increasing gas price from 30 Cents to a dollar, from a dollar, it would go to 1.5 dollars to $2  eventually, a lot of the customers in our areas of operation thought that the gas price has been fixed at one dollar .

We cannot fix gas price for the industry at one dollars, if not, if we try that, we would have a problem immediately. So, this price that has been released now is for PHCN alone because the 30 cents they were paying before was extremely too low and the gas producers can’t actually do anything at that rate.

But by increasing it from 30 cents to one dollar, it is over 300 percent increase. That is an incentive to the producers to now go ahead to gather all the gases they are flaring and channel them in for electricity generation. but the price for industrial utilization of gas is still being awaited as that has not been done with
Don’t you think the new gas price would lead to a hike in electricity tariff in the country?
There is something we do in this country that amazes me.

You find homes that burn diesel everyday  as they spend close to about N30,000 to N50,000 per month running generators and then you increase tariff to a point where they would pay N15,000 to N20,000 a month, people are complaining. It is the duality of Nigerians ability to perceive a situation that is really the problem.

If we increase tariff and we have constant supply of light, it can eliminate the use of generators. It also eliminates pollution to the public. So, it is in our interest that tariff increases and we get better service at the end.

How in your view can the country reap fully the inherent gains in gas  exploration and production as designed in the country’s gas master plan?

To start with , any organization that does not have set down policy cannot make any headway. Some policies have been in the House of Assembly for ages  .  Also there are several versions of the Petroleum Industry Bill flying all over the whole place.  So, the people need to know what is really going  on in the industry because they cannot make  inputs on something they don’t know about.

You don’t need to be an engineer or some body in the oil and gas sector to be able to make good input into it and people from all walks of life will like to look at how it would impact on them. The collation of these facts would enable us to develop and perfect  policies that would guide our oil and gas sector.

The potentials are immense but we need to get our house right. I think the current minister with her wealth of experience should be able to husband this to its  conclusion. Ordinarily you can never pass a law in this country that hundred percent of the populace would agree to . So, whatever benefits the country more as a population is what we should go for.

What do you think would be the likely impact of the fall in global oil price to 2010 budget implementation?
The president has timely requested for a reduction in the benchmark and also a cut down in the budget to a more realistic level.

That means he is being proactive and  that should be able to put the economy in proper perspective to actually achieve the objectives it was designed for.  The government economic agenda is being evaluated to prune it down to a level that results can be seen where it is achieved. If what he is doing is not done the impact on the economy might be heavy and destructive.


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