Oil & Energy
Shell Promises To Support Nigeria’s Domestic Gas Plan For Industrialisation
Leading energy company, the Shell Petroleum Development Company of Nigeria Limited (SPDC), has restated commitment to support the Federal Government’s goal of using the country’s proven gas reserves to trigger economic activities for gas-based industrialisation.
The SPDC’s Managing Director and Country Chairman of Shell Companies in Nigeria, Mr. Osagie Okunbor, said Shell’s support was shown in the company’s multi-billion dollars investment in four of Nigerian National Petroleum Corpo-ration’s (NNPC) ‘Seven Critical Gas Development Projects’.
Speaking at the Nigerian Gas Association’s 12th International Conference and Awards, held virtually on February 25, 2021, under the theme, “Powering Forward: Enabling Nigeria’s Industrialisation via Gas”, Okunbor said, “Shell has invested in the Assa North Gas Project; Four Unitised Gas Fields; Brass Fertilizer Company; and the Cluster Development of Okpokunou/Tuomo West (OML 35/62) to support the government’s drive for national development.”
He said, “I am very happy that NNPC and the Nigerian Content Development and Monitoring Board have taken key roles in these projects. These are positive steps.”
He commended the government’s recent progress in gas development and stated support for NNPC’s aspiration to grow domestic gas usage in Nigeria to 5 billion cubic feet of gas per day from its current 1.7 billion cubic feet of gas per day by 2022.
Okunbor said, “Nigeria has launched out on a few audacious and, frankly, great projects to essentially drive our ambition as a country in this regard. Let’s find a way to make sure that we stay the course and begin to put our efforts in a consistent manner towards downstream where our country can get ultimate benefit for gas.”
He counselled for robust engagement in discussions for an agreeable price framework in order to attract investments in the country’s rich gas sector.
“A robust pricing framework would be very helpful to unlock Nigeria’s proven gas reserves, especially for Power, Agriculture and Industrial sectors.”
Okunbor said the current pricing regime does not quite fit the wider framework of what the gas industry does.
“We want to incentivize methanol and fertilizer production, which is extremely important, to gear up our agricultural sector but the price regime now in that sector is lower than the kind of prices that you have for supply to the Power sector and industrial establishments”, he said.
“To make domestic gas work, we do need a right price regime. It might just mean that some sectors are supported more than others that can naturally carry themselves. The Petroleum Industry Bill provides that framework,” Okunbor said.
He urged policy makers to strike a careful balance between trying to raise funds – in terms of the kind of taxes and royalties that are put on gas – and understanding that this is actually much more of a resource that drives national development.
“Gas is by far more important as a catalyst for development, he said.”
With over 200 trillion cubic feet of gas proven, the world’s 9th largest proven gas reserves, Osagie said Nigeria can satisfy both domestic and export markets of gas if the right policies and processes are put in place and the country continues to drive those policies, processes and gas infrastructure.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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