How New Draft National Gas Policy Will Improve Electricity Supply


The impending danger threatening to throw Nigeria into darkness due to lack of gas supply which has left many of the country’s power plants dormant may seem to be over.
Stakeholders across the gas value chain have expressed optimism in the new Draft National Gas Policy released to over 1,000 stakeholders by the Ministry of Petroleum Resources, last week.

For several years, gas-to-power constraints have been a major challenge for gas producers, industries, homes and power generation firms due to constant attacks on gas infrastructure assets by Niger Delta militants and gas pricing disagreements.

However, hope seems to be on the horizon, when last week, in Abuja, the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, announced the release of the gas policy document to stakeholders at the recently concluded Nigerian Gas Association (NGA) 10th International Conference and Exhibition, bringing an end to the several years of absence of a clear-cut policy for the gas sector.
According to Kachikwu, the draft gas policy promotes a competitive business environment for both current and new investors, articulated vision for the sector and sets policy goals, strategies and an implementation plan for the medium to long term targets for gas market development.

Kachikwu explained that most of the investment required in the sector will be drawn from the private sector, adding that the government will set the environment and support investors with appropriate interventions to bring their projects to fruition.

He said: ‘‘Hence, our policy challenge is to develop a policy, institutional, legal, regulatory and fiscal framework that is attractive to the private sector.

On institutional framework, he said reforms capable of translating aspirations into results will commence with the strengthening of the policy making and surveillance capability of the Ministry of Petroleum Resources by introducing new technical resources, restructuring of existing departments, and assignment of additional mandates.

He said, ‘‘These reforms are clearly articulated in the proposed National Gas Policy, and will be further clarified by legislation.

He added, ‘’The attainment of these projects will not only broaden the economy; related industries will grow out of these projects, such that jobs and other multiplier benefits will follow. This is the direction we must follow.’’
Mr. Bolaji Osunsanya, the President of NGA/Managing Director and Chief Executive Officer (CEO) Oando Gas and Power, stated that Nigeria’s current gas production can deliver 32GW if fully deployed for power, adding that in this scenario, we would still be behind India, South Africa and many other developing economies in making sizeable quantities of gas available for domestic electricity consumption.

He maintained that gas-fuelled generation accounts for only about 2.5GW of the current generation, stressing that due to poor planning, a further 2GW of generating plants are stranded with no gas supply.  This, he said would seem to underscore the size of the opportunity that exists to fill this obvious gap.

He said, ‘‘Gas supply has been highlighted as the weak link in the development of the power sector.  While we would not debate how we got here, we will rise up to the challenge of ensuring that gas is made readily available for the development of the electricity supply industry.

He added, ”It is clear that with a focused development, domestic gas can be harnessed to fuel the entire power demands of the country and beyond.’’

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