NALPGAM, ALDG charge Minister of State Gas Resources, Ekpo to transition Nigeria to gas-based economy, develop blueprint to boost exploration, production

Oredola Adeola

Nigeria is poised to become a gas-based economy, according to stakeholders who revealed that the establishment of the Ministry of State Gas, within the Ministry of Petroleum Resources will facilitate this transition, therefore calling on Ekperikpe Ekpo to develop a blueprint that will encourage investment in upstream and midstream and increase the country’s production and processing capacity to over 200 million tons per annum of combined LPG, LNG and CNG.

Mr. Oladapo Olatunbosun, President, Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) in a chat with EnergyDay, commended President Bola Tinubu for creating the Ministry of State Gas Resources.

He therefore urged the new Minister of Gas to focus on laying a solid foundation for the upstream and midstream gas industry, rather than the cosmetic approach of focusing on marketing and distribution of processed gas.

He recommeded the establishment of more than five LNG and natural gas liquids (NGL) companies of the same size as NLNG, to explore gas molecules in the country.

According to him, Nigeria’s domestic gas production capacity should increase from a total production capacity of 22 million Tons Per Annum (mtpa) of LNG and 5mtpa of Natural Gas Liquids (NGLs) based on NLNG combined capacity to over 100 mtpa of LNG and 20mtpa of NGLs in the next four years through the combined efforts of more than four large scale gas companies.

Olatunbosun also encouraged the pioneer gas Minister to come up with a long-term solid plan that will outlive President Tinubu’s administration, warning that if the country does not plan ahead, it will suffer the same crisis it encountered with the supply and pricing of Premium Motor Spirit (PMS).

He said, “The Minister has the potential to make the Gas Ministry attractive by coming up with a blueprint of programs that his successor can continue to embrace in the future. If we do not plan ahead, Nigeria will continue to stage cosmetic investments focusing on distribution, which may backfire in the long run.

He said, “While it is a good idea to continue to lay gas pipelines across the country, it would amount to a waste of scarce resources to focus more on gas pipelines at the expense of gas development, exploration, and production,” he said.

NALPGAM stated that Nigeria is facing a shortage of natural gas, LNG, and LPG to meet domestic demand, and lacks the processed gas molecules needed to drive industrialization and economic growth. The NLNG and other gas producers are not meeting the domestic need.

“To address this issue, serious investment is needed in exploring all the gas fields across the country that are currently idle and unexplored.

“Private-sector collaboration is also required to unlock this huge potential, as government alone cannot drive the process.

“Nigeria, despite having more gas than oil, has primarily focused its investment attention on crude oil production, which it has in lesser quantity. This has resulted in the country flaring away the gas molecules that are needed to power the country and drive industries.

“The situation is ironic because Nigeria has enormous reserves of gas that could be tapped into for the development of the Nigerian economy, including power generation and industries such as petrochemicals and fertilizers, but has continued to focus on crude oil.

“The Minister should initiate a programme that aims at boosting the effective domestic supply of gas through collaboration with investors and other critical stakeholders,” he stated.

The NALPGAM President also suggested that the Nigerian government should unlock access to infrastructure funding for gas from development and multilateral banks, including Afreximbank, AfDB, and International Finance Corporation(IFC).

“This would increase private sector interest in gas exploration and production in Nigeria by providing access to cheap and sustainable funding options.

“The private investors and state governments should be offered the opportunity to collaborate through a Public Private Partnership for a shareholding stake in gas exploration and processing.

“The government should not be allowed to control the industry, as government institutions and enterprises are not good managers of business. Instead, these public agencies should seek collaboration with private companies to explore the huge gas reserve in the country,” the NALPGAM President said.

Olatunbosun believed that prioritizing this long-term drive to conserve foreign exchange and pave the way for exportation would enable Nigeria to earn more forex.

He also encouraged the Minister to focus on working with the right people, including marketers, terminal owner producers, and government agencies, to seek the right information and collaboration.

The President of NALPGAM emphasized that the gas economy is expanding globally while the crude oil market is shrinking, adding that simply focusing on marketing and pipeline alone would limit the country to the crisis it is currently facing with supply, availability, and price hike of Premium Motor Spirit(petrol).

The Association of Local Distributors of Gas(ALDG) in a statement obtained by EnergyDay revealed that with the appointment of Ekpo, who degree in Ecology from the University of Calabar and a Masters, focused on environmental pollution and toxicology, as the Minister of State for Gas Resources, Nigeria is looking to transition speedily to a gas-based economy.

According to the ALDG gas will drive transportation, industrialisation, power generation, and others.

Nagendra VermaNagendra Verma, Managing Director, Nipco Gas Plc, stated that a separate Ministry for Gas Resources is certainly a big boost for the gas industry in Nigeria.

He hinted that a new Ministry of Gas will surely provide a focused approach of deepening the indigenous gas utilisation in Nigeria and neighbouring countries.

He described the decision of President Bola Tinubu to create the Ministry as a very thoughtful and progressive step that will unlock the huge gas reserves in the country.