Gas Producers Urge FG to Defray $1bn Legacy Debts

Peter Uzoho

Gas producers have called on the federal government to pay up the legacy debts owed them for gas supplied to thermal power generating companies, amounting to about to $1 billion.

Speaking at a panel session at the just concluded Nigerian Oil and Gas Conference and Exhibition (NOG) 2022 in Abuja, Managing Director of Shell Gas Limited and President of the Nigerian Gas Association (NGA), Mr. Ed Ubong, expressed the displeasure of gas producers over the debt owed them.

They said that defraying the debt in addition to introducing a free market pricing regime for the gas sector would guarantee the continuous operation of thermal power generating companies in the country. 

Canvassing for a holistic approach towards fixing the escalating gas crisis, they identified insecurity, naira depreciation and lack of workable pricing template as some of the factors affecting the development of Nigeria’s gas sector

In the last six months of 2022, the national electricity grid had witnessed no fewer than five collapses, which were caused by multiple factors including gas shortage arising from non-payment for gas supplied, vandalism of gas transportation pipelines, lack of active gas supply agreements (GSAs), among others. 

The power industry regulator, Nigerian Electricity Regulatory Commission (NERC) had in June assured Nigerians that there was going to be improvement in the power sector with effect from July 1, 2022.

NERC Chairman, Mr. Sanusi Garba, who relayed the information during a media briefing in Lagos, had said that participants in the electricity sector including the Transmission Company of Nigeria (TCN), Generation Companies (Gencos), distribution companies (Discos) as well as gas producers had agreed to activate contracts that would ensure that at least 5000mw of power was generated and delivered to Nigerians daily.

But contributing at the panel, which centred on “Harnessing the Opportunities in the Nigerian Gas Sector,” Ubong said once that $1 billion legacy debt was cleared, the government could then hold gas producers responsible for failing to supply gas to the Gencos.


He also tendered an apology to Nigerians for the current scarcity of gas in the country, especially within the last six months.

Ubong said: “There is not enough gas for cooking, so the cooking gas prices have gone up. There is not enough gas to fire the thermal plants, so there is virtually no electricity.

“It is very clear that upstream players are not happy with the legacy debt that they are being owed for gas supplied for power, close to a billion dollars. My appeal to the federal government is: let’s find a way and pay this money so that there will be peace.