…Create $51bn investment opportunities

Steve Agbota

Stakeholders in the gas sector have advocated the establishment of efficient gas hubs as way of positioning Nigeria as Africa’s regional hub for gas based industries.

To this end, about $51 billion worth of investment opportunities currently exist in Nigeria’s gas sector. The industry has investments in Free Trade Zones (FTZ), central gas processing facilities, fertilizer plants, gas exploration and production, pipe milling and local fabrication yards, gas transmission, power plant projects, flare gas commercialisation initiatives and liquefied petroleum gas plants.

However, for Nigeria to maximise its potential in gas industry and compete effectively government needs to begin seeing gas as a commodity just like other commodities in the country.

Related News

Speaking at the 2018 natural gas business forum in Lagos with the theme, “Gas Policy, Markets and Regulation: Catalysing Development of Gas Industries Hub,” organised by Nigeria Gas Association (NGA), Prof. Konyin Ayayi, a Managing Partner at Olaniwun Ajayi, said the gas trade at the hub occurs under standard and transparent conditions that are formed in such a way that they boost liquidity.

He added: “When a hub is sufficiently liquid, a physical delivery, i. e., the supply, is carried out as a result of multiple trading and searching for trading opportunities. A hub allows the participants of the trading carried out within their operating area to access short, medium and long-term supplies, as well as access a large number of sellers and buyers (these can be producers, other suppliers or large customers).

“Within a hub, all the participants have to be treated in a non-discriminatory way. To allow a smooth operation within a hub, the potential users of the hub’s services should meet the appropriate financial and industrial standards.”
He said the establishment of a gas hub required actions, which include involvement of financial institutions and sufficient network capacity to prevent separate islands that behave according to their own supply/demand dynamics.
In his welcome address, the NGA’s President, Mr. Dada Thomas, said that gas is the fastest growing fossil fuel and over the next 20 years, and is expected to emerge as the main hydrocarbon component of a more sustainable mix to power the world’s economy.

He said, “today, very understandably, a lot of people are more focused on the current volatile conditions associated with the business, commerciality amid extensive geopolitical and security risks in the country. We at NGA believe these conditions are not simply cyclical ones. To a degree, they are connected to longer term trends – the restiveness in Niger Delta and pipeline vandalism being some case in point.

“And despite the current turbulence associated with sanctity of contracts and huge legacy debt from the power sector, I see reasons why it is still credible to talk of a coming age of gas in Nigeria.