By Michael Eboh

NIGERIA will need an investment of about $2.3 billion, an equivalent of about N460 billion to meet the Nigerian Gas Master Plan’s target of 2,300 kilometres of pipelines across the country to boost gas supply, according to a report by the Centre for Social Justice, CSJ.

File: gas

The CSJ in a report titled: “Issues in Implementing the Nigerian Gas Master Plan,” however, stated that due to investors’ apathy in the sector, the Federal Government should concentrate on providing funding for the project from available resources.

“Due to a number of reasons, mainly the risk of politically inspired violence, vandalism, the risk of expropriation and the long gestation period before the investment becomes profitable, international oil companies are unwilling to invest in gas projects while government and citizens are desirous of gas investments. “The Nigerian government can afford to build the pipelines from public resources,” the report said.

The report, written by Mr. Eze Onyekpere and Ikenna Ofoegbu, further lamented the fact that the evaluations of the investment decision for new Liquefied Natural Gas, LNG, projects in Brass, Olokola and Train 7 of the Bonny plant are being unduly prolonged.

The report, however, warned that considering new discoveries of gas and investments in other countries, if the Final Investment Decisions, FIDs, for the LNG projects are not taken soon, the feasibility of the projects in terms of attracting buyers may be reduced.

The report said, “Nigeria can afford to build the new LNG plants either from the treasury, public loans and bonds, among others, or in collaboration with private sector operatives. “Also, the idea of creating vehicles to tap resources from small and medium scale investors would be necessary to avoid over-reliance on the proverbial foreign investors who do not have a developmental, but strictly profit agenda.”

To this end, the report recommended that the Federal Government introduced incentives that are benchmarked with those offered by other gas-producing nations in Africa. According to the report, this will encourage investments in gas exploration and also help increase the country’s gas reserves.

It further said that the Nigeria Gas Master Plan (NGMP) and the progress recorded so far in its implementation should be properly documented and made available, so that the public can make inputs and review the document. On funding for the gas master plan, the report said, “If the $18 billion unremitted oil funds identified by the Nigeria Extractive Industry Transparency Initiative, NEITI, is recovered, a part of it may be dedicated to the NGMP.

“Government may also consider dedicated bonds and developmental loans including Diaspora Bonds to fund the Master Plan. The Federal Government can consider guaranteeing loans and bonds for reputable companies to invest in the gas sector. By this arrangement, the Federal Government will only incur contingent liabilities which will not crystallise if the projects are well managed.”

To boost the fortunes of the gas sector, the report further advised that the full implementation of the Domestic gas Supply Obligation be vigorously pursued while sanctions should be meted on defaulting firms.