FG Eyes Improved Gas Investment

Chineme Okafor in Abuja

The federal government has stated its desire to boost investment in Nigeria’s natural gas market with its formal activation of the National Gas Transportation Network Code yesterday.

According to the Technical Adviser (TA) on Gas Business and Policy Implementation to the Minister of State for Petroleum Resources, Mr. Timipre Sylva, Justice Derefaka, the launch of the National Gas Transportation Network Code would open a vista of opportunities for investors interested in the country’s gas market.

Sylva in February had launched work on the National Gas Transportation Network Code and review of the code’s licensing framework and development of all its ancillary agreements have however been firmed.

Derefaka told THISDAY in a telephone chat that the new code was encapsulated in the National Gas Policy of 2017. He explained that it was critical to the federal government’s objective in firming up the country’s domestic gas obligation as well as promoting gas export.

“The network code will ensure that the wrong quality gas does not go into the pipeline in addition to guaranteeing gas pipeline integrity, open access to pipeline and common understanding on metering,” said Derefaka.

He noted that the code would also provide a uniform platform in terms of guidelines for agreements between buyers and sellers of gas to ensure transparency and eliminate existing bottlenecks.

“It is a major policy thrust of government to unlocking the potentials of gas as a resource and revenue earner for Nigeria,” he further explained.

According to him, the government believes that the implementation of the code would provide for investors in Nigeria’s gas market, the confidence to invest heavily in the sector and subsequently enable Nigeria to consolidate on the multiplier effect of gas on its economy.

“Again, to make 2020 as the year of gas count, my takeaway on the code is, like I said during the launch, I’d like to reiterate again that this is the best gift of the year to the gas sector and indeed the international investor community.

“The key strategies of the national gas policy are to stimulate the multiplier effect of gas in the domestic economy; position Nigeria competitively in high value export markets and guarantee long-term energy security in the country.

“Additionally, the Nigerian Gas Master Plan, the National Gas Supply and Pricing Regulation 2008 which is currently undergoing intensive review by all the critical stakeholders in the gas sub sector and the National Gas Policy 2017 all recommend the introduction of the Nigerian Gas Transportation Network Code,” Derefaka stated.

He noted that, “once we go live on Monday, 10th August,” the network code will act as an enabler for market liberalisation in the gas sector.

Derefaka also stated that the code was designed to ensure that gas pipeline integrity, open access to pipeline and common understanding on metering with a set of rules and protocols designed to govern the operations of gas network players are followed.

“The network code ‘Go-Live’ aims to operationalise and harmonise gas balancing arrangements to support the completion and functioning of Nigerian gas market, the security of supply and appropriate access to the relevant information, in order to facilitate trade and to move forward towards greater market integration.

“The code will also enable new ways of doing business in the Nigerian domestic gas market. And every gas meant for domestic use either for power, petrochemical or industrial, will have a single entry and exit point to cut short the sharp practices prevalent in the current supply and distribution system,” he further said.

He said the code was long overdue, and that the gas market has anticipated its launch and operationalisation.

Further, he explained that from an investor perspective, “it assures that when they invest, their gas will be operated in best practices and help in boosting the confidence of international financiers because they are always concerned about things being done properly.”

“Once the code goes live and as part of regulatory and operational mechanism, it has other ancillary agreements and licenses to be issued to its users; these include amongst others, supplier, operator or transporter, shipper and agents licenses framework/accession agreement; network entry/exit (interconnection) agreements and Operational Balancing Agreement (OBA).

“There are also business process documents including capacity registration form, capacity transfer notice, nomination forms (rolling annual estimates, weekly estimates, daily notice, trade nomination, re-nomination), curtailment notice, invoice, invoice remittance advice, maintenance notification form, imbalance form in place for effective operations and functioning of the code,” he added.