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National Gas Transportation Network Code will encourage transparency in oil & gas industry

The launching by the Federal Ministry of Petroleum Resources (FMPR) in conjunction with Department of Petroleum (DPR) formally launch the National Gas Transportation Network Code on Monday, February 10, 2020 will be welcome development because of  its  numerous benefits.

The  launching which  done as part of the opening day of the 3rd edition of Nigeria International Petroleum Summit taking place at the International Conference Centre (ICC) Abuja  will open a vista of opportunities interested investors   in the  gas sub sector of the oil and gas industry.

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The Nigerian Gas Transportation Network Code which is critical to government’s objective in firming up the country’s domestic gas obligation as well as promoting export. The network code which 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.

The review of the Network Code licensing framework and development of all its ancillary agreements have been firmed.

The code will also provide a uniform platform in terms of guidelines for agreements between buyers and sellers which will 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

President Muhammadu Buhari (Honourable Minister of Petroleum Resources) and Minister of State for Petroleum Resources, Timipre Sylva are very passionate about it.

According to the DPR in its latest report, Nigeria’s natural gas reserves has been on the increase from 2013 and is projected to continue to grow at a conservative rate of about 1.0per cent It said the reserves volume of the operated deep-water acreages in Nigeria is about 21percent of the country’s total reserves of liquid hydrocarbons (7.746BillionBbls/37.002BillionBbls). Yet the acreages accounted for about 36.08% of the Nation’s total production in 2018.

It is believed that the implementation of the code would provide for investors in gas, the confidence to invest heavily in the sector and enable Nigeria consolidate on the multiplier effect of gas on the economy.

The DPR had in the past said the lack of funding; infrastructure; transitioning of legacy agreements and commercial framework were major obstacles to the implementation of the NGTNC.

It reportedly stated that the country’s gas industry was interested in a sector where there are multiple pipelines as against one owner; no inherent natural monopoly; open access; hub or traders; separation of commodity and infrastructure; alternative producers; a free market driven by willing buyer/willing seller; and a guided network code.

The DPR at that time also said the absence of these features were a threat to its implementation of the NGTNC.

The government in recognition of the potential of natural gas, has put in place various interventions to stimulate gas utilisation and monetisation.

The reforms were initiated to re-position the gas sector and deliver on government’s key aspirations.

These aspirations include developing a viable domestic market; creating new industry out of the old oil industry; capturing economic value; generating as much revenue from gas as from oil; and ending gas flaring by the year 2020.

In recent years, government has begun the implementation of a nationwide gas infrastructure blueprint aimed at connecting all key supply sources to markets across the nation.

These interventions and other ongoing government reforms in the industry had high prospects that could boost investors’ confidence in the country’s gas sector, industry analyst have said.

Ladan mordacai, former director of DPR had explained that this could provide a radical structure that will enable Nigeria consolidate on the multiplier effect of gas on her economy, strengthen her standing in the high value export and domestic markets as well as manage her gas resources for national energy security.

 

Olusola Bello

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