National gas transportation network inaugurated in Nigeria

49916485027 ccd2b6d0bd cThe Nigerian government has inaugurated the national gas transportation network that sets out the terms and gas transportation specifically between gas producers, shippers and their agents

The objectives according to the, Timipre Sylva, Junior Minister, Petroleum is that it would  help to grow the gas infrastructure, expand gas utilisation, curb gas flaring and provide codes to standardise the gas value chain in line, and go a long way in deepening economic development, improve gas supply and  attract more investment opportunities in the nation’s gas value chain.

Sylva said, “It is my firm belief that the implementation of the network code which is a set of rules and principles guiding the use of and operations of gas transportation network system will deepen the domestic gas market. It will also unleash the potentials of accelerated growth and economic development for our nation.

In the coming months, this code together with related intervention will improve gas supply to power, growth of gas based industries, domestic Liquefied Natural Gas, LNG, Liquefied Petroleum Gas, LPG, Compressed Natural Gas, CNG penetration, as well as enhance revenue to the government and create investment opportunities for our people.”

Slyva said the Nigerian Petroleum Resources, the government organ in the Petroleum Resources Ministry with the statutory responsibility of ensuring compliance to petroleum laws, regulations and guidelines, had developed the Network Code Electronic Licensing and Administrative System, NCELAS, which would be used by the regulator to receive process and issue all applicable licenses to all network players as well as administer all regulatory roles required to ensure the optimal market impact.

“The NCELAS is a secured online environment that would provide optimum value for all stakeholders that would be operating under the network code. With the unveiling of NCLEAS and the execution of the network code framework agreement, the regime of gas transportation through a world class network code would have been firmly established in Nigeria for the benefit of all stakeholders,” he added.

Mele Kyari, group managing director of the National oil body, the Nigerian National Petroleum Corporation, NNPC, said the inauguration of the network code was an opportunity to enhance gas delivery and utilisation in furtherance of the Nigerian government objective of transforming gas into a key component of the nation’s energy mix and revenue sources.

“We will continue to give our support to this process to ensure that the full delivery of this process is achieved. We commit to working closely with the DPR to ensure that the target of the government is attained. This opportunity has provided the right frameworks for the transportation of gas from the source to the end user in order to get value. We are happy to have this framework on ground and we are ready to collaborate with our partners, the gas off takers, gas producers, transportation companies, shippers and all those involved in the gas value chain.”

The Nigerian Gas Company, a subsidiary of the NNPC set up to gather, treat, transmit and market natural gas and its byproducts to major industrial and utility gas distribution companies in Nigeria and its neighbouring countries will serve as the transporters while Gas Hub and Dangote Fertiliser ltd, two locally owned indigenous companies will serve as the shipper, while the gas aggregation of Nigeria ltd will in the role of an agent.

Gas Aggregation Company incorporated in 2010 is the vehicle for implementation of the Nigerian Gas Master plan commerce framework will act as the as the agent-the master plan requires the establishment of a strategic domestic aggregator for domestic gas market whose responsibilities will be to process request from gas buyers.

KPMG Nigeria, the international the audit, tax and professional services outfit in its 2020 Nigeria Gas Watch Study, pointed out that players in the Nigerian Gas Sector are optimistic that the NGTNC will attract more investors to gas pipeline infrastructure and will provide a uniform platform in terms of guidelines for agreements between gas sellers, transporters and buyers, which will ensure transparency and eliminate existing bottlenecks.

However, it said, “There are concerns that the Network Code alone cannot solve the country’s lingering gas policy problems, especially as Nigeria still lacks a comprehensive legal and fiscal regime for developing its natural gas. Some stakeholders are also of the opinion that gas should be recognised as a standalone product (divorced from crude oil), and that the terms “oil and gas” should be separated, to enable both sectors to operate and grow separately to achieve their potentials”

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