By Jeph Ajobaju, Chief Copy Editor
There will be sufficient gas supply by the first quarter of 2021 (Q1 2021), more than meet the needs of households and industrial outfits, the Nigerian National Petroleum Corporation (NNPC) has pledged.
NNPC Group Managing Director, Mele Kyari, disclosed in Abuja that the accelerated development of gas resources will soon begin to bear fruit.
He told the Voice of Nigeria (VON) that contrary to doubts expressed by the public about the deregulation of the downstream petroleum industry, the market has been fully liberalised and subsidy completely withdrawn.
Some projects critical to the delivery of gas hitherto delayed are now being completed, Kyari said, per reporting by THISDAY.
His words: “We have several projects spanning 10 years. Many of them were hugely delayed for various reasons, sometimes for financial constraints that government faces over time, and also sometimes probably out of a sheer lack of will to deliver on those projects, and there are a number of them.
“There’s a major trunk, Nigeria’s gas pipeline spanning all the way from the east, specifically from around Port Harcourt, all the way across the country into Abuja, all the way to Kano.
“Then also you have another line that links the east to the west, through what we call the Escravos-Lagos pipeline segment, and then the OB-OB 3 pipeline. The connection of these three means that you can take gas from anywhere in the country, and also deliver to the key consumption point.”
Completion of infrastructure
Kyari gave an assurance that by mid-February 2021 there will be sufficient gas for domestic consumption with the completion of some infrastructure and there will be enough stock waiting for buyers, rather than the current opposite situation.
“More importantly, there’s what we call the OB-3 gas river crossing. That’s a pipeline that is supposed to cross the River Niger to join the OB-3 network and that also has been hanging for a long time.
“We have also put the process [in place that] by end of January or latest by middle of February, we would have achieved this. What that will mean is that gas will be waiting for customers and not the other way around.
“Today, customers are waiting for gas. There are a number of customers we are not able to satisfy today, including the major customers like the Dangote Cement factory in Kogi State, and many other assets that we are not able to deliver full gas to because those infrastructures are not in place.”
Kyari reiterated that the oil and gas sector is now fully deregulated, and as far as institutions of government and markets are concerned, the sector is fully liberalised with little government interference.
The only intervention the government does, he explained, is to prevent ordinary Nigerians from being exploited by marketers.
“Deregulation means government does not pay any subsidy on the cost of petroleum, or any other commodity. So this market is completely deregulated.
“It means that people can go to the market, buy the product, come into our markets, and sell or even buy from the NNPC and sell to the market, and then recover the cost and then at a reasonable margin.”
Transition challenges
He noted that there are still challenges in the sector because deregulation is still in transition, but stressed that there is no provision for subsidy in the both the 2020 and 2021 budgets.
Kyari said the difficulty marketers have in importing petroleum products because of scarce foreign exchange is being resolved with the Central Bank of Nigeria (CBN).
“And once that (framework) is put in place, of course, the NNPC’s monopoly of the importer of last resort will vanish and therefore the markets will react to it.
“Why people are confusing it for lack of deregulation is that you always have a price cap in a market environment, otherwise the ordinary people will be exploited by marketing companies. It can even be the NNPC.
“When you don’t put a cap around the market conditions, then you’ll seem to have allowed full-fledged exploitation of the ordinary people.
“There’s no country in the world that does not have some form of a bracket, a basket within which the marketing companies can do business, and this is determined by the market.”