The Minister of State for
Petroleum, Dr Ibe Kachikwu, on Monday said Federal Government would give more attention to the development of gas as a major revenue earner for Nigeria.
Kachikwu, who stated this in Abuja at the 10th Nigerian Gas Association International Conference, said that the country was determined to reverse its over-dependence on oil as benchmark for the economy.
The theme of the conference is “Nigerian Gas Roadmap and Its Potential for Regional and Global Influence: Its Implementation, Challenges, Opportunities and New Way Forward”.
The minister said: “I must say that over the years there has been a blatant neglect of this sector. We really haven’t focused on gas; all had been on oil production.
“With regard to the recession today, it is clear to us that if we develop a two window of economic earnings, a lot of emphasis will move to gas.
“We are going to be introducing new technical resources, restructuring existing departments and assigning new managers to the existing departments. These reforms are clearly articulated in the proposed national gas policy.”
He said that the draft on Gas Policy would be released later and that the policy would promote a competitive business environment for both current and new investors.
Kachikwu said that government’s vision was to make Nigeria an attractive gas-based industrial nation, give primary attention to meeting local gas demands and develop significant presence in the international market.
He said that priority of government was utilisation of natural gas for domestic needs with the power sector as key priority end-user.
He added that government was in the process of completing draft legislation on reforms in the petroleum industry.
“The new fiscal policy we are working on will make gas a stand-alone, separate from oil and not consolidated on oil taxation.
“Our intention is to retain the current pricing framework for a limited period. It will end when sufficient gas volumes are built up to a level that will underpin a competitive gas market.
“Under such condition, wholesale gas price will be market-led,” Kachikwu said.
He said that gas flaring was still a prevalent practice in the petroleum industry, adding however, that government was clear protection of the environment was a more important objective than oil and gas production.
“Government is determined to see flare out in the earliest shortest time. We are seeking to exit gas flaring by 2020, 10 years before the 2030 deadline the UN gave.
“To achieve this, a number of measures will be introduced; gas utilisation will be a priority consideration over every other consideration for handling of associated gas.
“We will be increasing the gas flaring penalties to an appropriate level sufficient to de-incentivise the practice of gas flaring.
“Our focus really will not be on penalisation; we will seek quite frankly to simply stop it and not you throwing money at us,” the minister said.
In his presentation, Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Dr Maikanti Baru, said that there were huge investment opportunities in the sector.
According to Baru, there is a 51billion dollar-investment opportunities existing in gas processing and transmission and general infrastructure development.