Decade Of Gas: Settle $1bn Debts, Fix Infrastructure, Operators Demand

Oil and gas companies have called for the repayment of about $1 billion gas legacy debts and the fixing of infrastructure to facilitate the Decade of Gas project of the federal government.

The companies which made the demand through Chevron Nigeria Limited said the payment for gas supplied to the power sector and commercial pricing of the product are necessary for the companies to produce more gas.

This is as the chief executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr. Farouk Ahmed said as part of efforts to make the gas supply to power sector attractive, a new gas pricing regime would be announced soon after the approval of President Tinubu.

Speaking at the official opening Decade of Gas secretariat at the NMDPRA office in Abuja,

Ahmed said the decade of gas declaration by the federal government was a deliberate effort to ensure that in the next 10 years (2021-2030) gas would become the main source of energy in the country.

He noted that to make the project successful, the government put together a team of stakeholders composed of the oil companies (sponsors group), and government agencies regulating the sector.

“The new price of gas will be revealed after further consultations and approval from the President. We need a price that gas is sold to power and to industry at a level that incentives the producers to invest in the sector and so that they can produce more gas”.

Chairman/MD, Chevron, Mr. Richard Kennedy on his part said the legacy debts have to be paid to create confidence in the sector.

“The decade of gas is to ensure that we re-establish investors’ confidence in the industry.

You do this by ensuring that all the legacy debts owed to the industry operators are paid and also ensuring that we have a cost reflective gas pricing”, he added.

Represented by Mr. Cosmas Iwueze, Joint Venture director, Kennedy assured the government that the companies would support the decade of gas plan.

The decade of gas policy is expected to deliver 10 projects that would significantly impact the economy.

According to the plan, the federal government’s target is to attract $14 billion in foreign direct investment, raise $12 billion in revenue through royalties and taxes, and create two million jobs by 2030.

Speaking earlier,  the special adviser to the President on Energy, Olu Verheijen, said the development of gas was a priority programme for the President Bola Tinubu administration.

According to her, “it’s has been a long journey with gas in this country. We have gone from being a major exporter of LNG to looking into our future when gas is going to play a big role in the industrialisation of our country”.

She said the government was determined to resolve all the legacy issues that would attract investment into the gas sector.

On his part, the Coordinator of the decade of gas secretariat, Mr. Ed Ebong said for progress to be made the debt owed by the power sector to gas producers has to be paid.