The Department of Petroleum Resources (DPR), has advocated for market-based approach to gas pricing, stating that this is crucial to attaining the gas-driven economic transformation agenda of the country.
Mr Sarki Auwalu, the Chief Executive Officer, DPR, disclosed this on Monday while presenting keynote address at the Pre- Summit Conference of the Nigerian International Petroleum Summit (NIPS) on the principal theme: ‘The Decade of Gas – Towards a Gas-Powered Economy’ in Abuja.
Auwalu, who also outlined five critical levers for gas development said it becomes crucial as Nigeria moves to leverage its abundant gas resources for national growth, diversification of the economy and to use gas as the fuel for economic transformation.
He described the levers as availability, accessibility, affordability, and acceptability as well as deliverability, which according to him, were critical to utilising Nigeria’s proven gas reserves of 203 trillion cubic feet (TCF) for national development.
He explained that a market-based approach to gas pricing would guarantee security of gas supply and security of demand, while also ensuring returns of investment and affordability of the commodity.
He said: “Whereas references have been made to the other elements in this discussion, right pricing of gas is requiring particular attention to ensure security of gas supply and security of credible gas demand.
The DPR boss commended President Muhammadu Buhari and the Minister of State for Petroleum Resources, Chief Timipre Sylva, for their outstanding leadership in deepening gas utilisation in Nigeria.
He said these efforts had culminated in the establishment of the National Gas Expansion Programme, National Gas Transportation Network Code and the National Gas Flare Commercialisation Programme.
Auwalu said it also include the ongoing construction of the ELPS-II, OB3 and AKK pipelines as critical backbone gas infrastructure required to improve gas deliverability and availability.
He said the government was also working towards the expeditious passage of the Petroleum Industry Bill (PIB) which would enhance clarity in legislative, regulatory , fiscal, and administrative frameworks in the industry.
“This bill, when passed into law, will eliminate the uncertainties and bottlenecks associated with gas development in Nigeria and accelerate the growth of the Nigerian gas market to a fully developed and matured status.
“Specifically, on gas matters, the PIB provides for the following: promotion of dedicated gas exploration and development, gas terms, fiscal separation of gas as a commodity.
“It will also enhance the domestic gas delivery obligation, tariffing structure & methodology, open access regimes and revised gas pricing framework, to mention but a few,” he added.
Auwalu said the DPR would continue to be an enabler and an opportunity provider in the oil and gas industry.
“Our focus remains the effective implementation of all policies and strategic programmes of government in an efficient manner that optimises the value of our petroleum resources for all stakeholders, all in overriding national interest”, he said.