Nigeria has huge and great gas potential yet untapped with poor gas production, high gas flaring and low domestic gas utilisation. The missing link has been the absence of the basic gas infrastructure to help harness the huge gas deposits that are been flared all over the exploration sites for many decades.
A recent move by government is to develop basic gas infrastructure to help harness the huge gas deposits, in turn increase gas production and domestic gas utilization and lower gas flaring in the country.
Over the years, the sector has been neglected and the foreign companies that are the major players into the exploration has operated the sector like a jungle business. Players has attributed the cause of poor gas production, high gas flaring and low domestic gas utilisation as lack of good policy in the sector.
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The good news is there is a policy in place now, the Petroleum Industry Act (PIA) 2021 though not tested. This has also led to redefining if Governance and Institutions Administration in the sector.
Recently, the federal government of Nigeria formally floated the governing council of the Midstream & Downstream Gas Infrastructure Fund (MDGIF) in line with the dictates of the new Petroleum Industry Act (PIA).
Over $20 billion will be needed yearly in the next 10 years to bridge the gas infrastructure gap in the country, which could exceed $200 billion in a decade.
The federal government inaugurated the nine-member council in third quarter year 2022 to help in fixing the critical missing link in Nigeria’s gas sector.
The main task of the nine-member council is to mobilise funds for the provision of the critical infrastructure for the gas subsector in order to reposition the Nigerian energy sector “to drive economic development and prosperity, nation and value to our partners, in accordance with the Petroleum Industry Act 2021 (PIA)”.
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In March 2021, President Buhari declared January 1, 2021 to December 31, 2030 as “The Decade of Gas” development for Nigeria, primarily to set the roadmap towards a gas-powered economy by 2030.
NMDPRA estimated that more than $20 billion yearly will be required over the next 10 years to bridge these gaps. This amount is different from the $10 billion Yemi Osibanjo stated in 2021.
The minister in charge, Mr. Sylva said “the fund, established under Section 52 of the PIA, resides as a directorate in the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)”.
As a directorate within the Authority, the minister said the fund would be expected to benefit from its internal reporting as well as operational and organisational processes, adding that in accordance with the PIA, 2021, the council shall supervise and make investment decisions for the fund.
“The midstream and downstream sector is where the jobs could be created and value added to the economy,” Sylva said, urging the council members to take their assignment seriously.
“There is an urgent need to focus on the major strategic plans and key initiatives to enable government set a clear trajectory to achieving the noble objectives of establishing the fund,” he added.
The terms of reference of the council, he said, include identifying critical and relevant stakeholders that can increase domestic utilisation of natural gas, LPG and auto gas, and develop a roadmap for transforming gas to a value adding product in Nigeria.
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The council has the minister of state petroleum resources as chairman and the executive director of MDGIF as chief executive officer.
Other members of the Council include: Dr Scholastica Nnaji, representing the Central Bank of Nigeria (CBN); Mr Victor Omata, representing Federal Ministry of Finance and Farouk Ahmed , Chief Executive of the NMDPRA, Mr Ahmed Bobboi, Abdullahi Bukar and Mr Effiong Abia, while the Legal Adviser, NMDPRA will serve as the Secretary to the Council.