Shell Pledges Support for FG’s 5,000 BCF Gas Expansion Plan

Emmanuel Addeh

The Shell Petroleum Development Company of Nigeria Limited (SPDC), has restated commitment to support the federal government goal of using the country’s proven gas reserves to trigger economic activities for gas-based industrialization.

SPDC’s Managing Director and Country Chairman of Shell Companies in Nigeria, Mr. Osagie Okunbor, said Shell’s support is shown in the company’s multi-billion dollars investment in four of Nigerian National Petroleum Corporation’s (NNPC) ‘Seven Critical Gas Development Projects’.

Speaking at the Nigerian Gas Association’s 12th International Conference and Awards, held virtually with the theme, “Powering Forward: Enabling Nigeria’s Industrialization via Gas”, Okunbor stated that Shell has invested heavily in the Assa North Gas Project.

A statement signed by the Media Relations Manager, SPDC, Bamidele Odugbesan, listed other projects as the Four Unitised Gas Fields; Brass Fertiliser Company; and the Cluster Development of Okpokunou/Tuomo West (OML 35/62).

He commended the government’s recent progress in gas development and restated 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.

“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 advised.

He called for a robust engagement in discussions for an agreeable price framework in order to attract investments in the country’s rich gas sector, saying it would be 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 incentivise methanol and fertiliser 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.

He added: “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 (PIB) provides that framework.”

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 it is actually much more of a resource that drives national development.

With over 200 trillion cubic feet of gas proven, the world’s 9th largest proven gas reserves, Okubor 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.