The President of Nigeria Gas Association (NGA), Engr. Dada Thomas, believes that with appropriate legal and fiscal policy, the country could earn $3.3 billion annually from the oil and gas industry.
The Leadership has learned that if Nigeria were to generate 10,000MW of power from gas-fired power plants, this could generate the said amount from gas sales revenue annually.
Thomas also noted that the investments are significantly coupled with the potential revenue, however key policies, legal and commercial decisions are required to make it all come together for good.
Gas industry developments
It is reported that Thomas said although Nigeria has done well in reducing gas flaring over the years from 2 billion standard cubic feet per day in 2015 to about 750 million standard cubic feet per day to date, this still equates to burning $700 million annually or wasting fuel that could have been used to generate nearly 3,000MW of electricity.
He, however, highlighted government’s determination to achieving zero routine flaring by 2020, having initiated the Nigerian Gas Flare Commercialisation Programme to help achieve this objective. Read more…
According to the Leadership, Thomas also expressed worry that though the country has had sanctions in the form of a penalty of N10 ($0.50) per thousand cubic feet of gas flared for many years, operators often pay the penalty rather than implement flare out programmes.
He said: “Effort by the government via the Department of Petroleum Resources (DPR) to increase the flare penalty to N420 ($3.5) per thousand cubic feet in 2008 failed, as the operators resisted the move and the DPR lacked the will to enforce the penalty.
“However things are changing. We now see that in general regulators, including the DPR are starting to enforce regulations. The roll out of the Nigerian Gas Flare Commercialisation Programme provides the carrot for compliant operators and new project flare gas developers while the enforcement of the penalty of $3.5 per thousand standard cubic feet by the DPR will provide the stick for those who violate the new policy.”
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