BY SEBASTINE OBASI

Stakeholders in the nation’s gas sub-sector have called on the federal government to review the gas pricing template.

They made the call at the last Nigerian Gas Association (NGA) annual general meeting and business forum held in Lagos, stressing that this is to serve as a bankable commercial framework and help boost the development of the gas industry.

President of the NGA, Mr. Saidu Mohammed, stated that the demand for gas has surged after the privatisation of the power sector.

“With at least 70 per cent of Nigeria’s power generation facilities built to be gas-fired, the demand for gas for this new market is set to put gas in its rightful place as the core driver in the efforts to bridge the power supply deficit in Nigeria,” he said.

According to him, the task in the years to come is to find, develop, process, transport and distribute sufficient gas to power industries and homes such that gas is regarded by the average Nigerian as the energy and feedstock of first choice.

“Suffice it to say that the value chain for gas in Nigeria remains the same with other developing countries, but the challenges inherent in the Nigeria chain are undoubtedly huge,” he added.

Also speaking, Deputy Group Managing Director, Dangote Sugar Refinery Plc, Mr. Abdullahi Sule, said that Nigeria still lacked sufficient gas supply for domestic use.

“Nigeria, a country with huge gas reserves, despite the power sector reforms still lacks sufficient gas supply for domestic use,” he said.

Emphasising the Group’s involvement in gas, Sule said that Dangote Group, generates about 262 Megawatts (MW). The power is generated as follows: “Dangote Sugar – 16MW; Dangote Cement, Obajana – 135MW; and Dangote Cement Factory, Ibese – 111MW.”

At Dangote Sugar, he said, the monthly gas consumption is about 9,000,000 standard cubic feet of gas.

According to him, “The Nigerian Gas Reserve is put over 180 trillion standard cubic feet. Nigeria, a country with huge gas reserves, despite the Power Sector Reforms still lack sufficient gas supply for domestic use.

“This has led to: – Gas supply disruption to the few functional power generating companies. Futile efforts were made by some state governments who commissioned Oil majors to increase generation, and the approved construction of four thermal power plants (Geregu, Alaoji, Papalanto, and Omotosho) with a combined capacity of 1,234MW to meet generating goal of 6,500MW in 2006. Another 14 hydroelectric and natural gas plants are all planned for completion in 2010 by the Federal Government.

“Huge investments are required for gas project off-take and credit risk management issues for potential investors in the sector.

“To realise the Federal Government’s goals to increase power generation through gas, they should continue to encourage use of gas due to its benefits (stop flaring, environmental friendly, and cost effective), which positions it to compete effectively with other refined petroleum products.

“Encourage more IPPs to boost power, and provide the much needed support for economic growth, and guaranteed returns on investments.

“The private sector therefore, has a critical role to play for the success of the gas to power projects. They should explore and maximise the vast opportunities that abound in the sector, as well as gas to power projects.”