The Nigerian government on Monday took a significant step in making it easier for investments into the gas sector by launching the Nigerian Gas Transportation Network Code which will ensure that the wrong quality gas does not go into the pipeline, guarantee gas pipeline integrity, open access and common understanding on metering.
The National Gas Transportation Network Code was launched by the Federal Ministry of Petroleum Resources as part of the opening ceremony of the ongoing 3rd edition of Nigeria International Petroleum Summit (NIPS 2020) in Abuja.
The network code is critical to the government’s objective in firming up the country’s domestic gas obligation as well as promoting export.
“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,” said Timipre Sylva, minister of state for Petroleum Resources.
The network code could assure investors that when they invest, their gas will be operated in best practices and help in boosting the confidence of international financiers to actively look at the domestic gas market.
The bulk of Nigeria’s gas production is for exports.
Justice Derefaka, technical adviser, gas business & policy implementation, to the minister of state for petroleum resources, said the network code is a gas market liberalisation enabler aimed at ensuring gas pipeline integrity, open access to pipeline and common understanding on metering. It provides a set of rules and protocols designed to govern the operations of gas network players in a way that impacts the gas market as part of efforts towards transparency and efficiency in the operation of pipelines in the country.
“The code will ensure transparency in the industry, guarantee fair and non-discriminatory access to gas transportation network, attract foreign investors, help to ensure that wrong gas does not go into the pipeline and ensure growth and development in the Nigerian as industry,” Derefaka said.
The network code aims to 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.
President Muhammadu Buhari, who was represented at the summit by Boss Mustapha, secretary to the government of the federation, expressed concern that despite huge energy resources Africa is blessed with, notably in oil and gas and other forms of extractive minerals, the continent still lags behind in delivering access to power to its teeming population.
He, however, noted that with series of reforms being carried out in the Nigerian petroleum sector, there was high hope of transforming the country to a regional and continental energy hub.
“The present administration is embarking on sectoral reforms in the petroleum sector to ensure cost reduction efficiency which would enhance attractive investment in oil and gas value-chain. Your investments are secure in Nigeria and our reforms would guarantee you a large return on investment,” he said.
Buhari said his administration has moved to “improve the business environment and drive investments in the upstream, midstream and downstream” as well as “enhance accelerated revolution by developing infrastructure for multi domestic utilisation of LPG and CNG as well as commence the process of gas flare commercialisation and increase of gas to power”.
He said the Federal Government has carried out an extensive work on the passage of the Petroleum Industry Bill which would ensure better fiscal governance framework for the sector.
Nigeria’s natural gas reserves have been on the increase from 2013 and are projected to continue to grow at a conservative rate of about 1.0 percent, according to a DPR report. The report said the reserves volume of the operated deep-water acreages in Nigeria is about 21 percent of the country’s total reserves of liquid hydrocarbons (7.746 BillionBbls/37.002 BillionBbls). Yet the acreages accounted for about 36.08 percent of the nation’s total production in 2018.
Over the years, the process of piping this gas has been fraught with challenges from the wrong gas transported over the pipelines to different metering parameters. The code seeks to eliminate these.
“The network 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,” said Derefaka.
As part of the regulatory and operational mechanism, the network code has other ancillary agreements and licences to be issued to the users of the code including Supplier, Operator (or Transporter), Shipper and Agents Licences 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.
OLUSOLA BELLO, ISAAC ANYAOGU & HARRISON EDEH
