Gas will soon be pumped to Nigerians' homes – Minister

No Comments » July 19th, 2008 posted by // Categories: Energy Development Project



Gas will soon be pumped to Nigerians’ homes – Minister

Saturday, July 19, 2008


Minister of Gas, Engr. Emmanuel Odunsi has called on Nigerian engineering firms in oil and gas industry to prove their onions by taking advantage of the local content policy of the Federal Government in the energy sector.

While touring the facility of Ocean Engineering Ltd, a subsea indigenous engineering firm in Lagos, the minister noted that Nigerians are endowed and competent to brace up to any change put before them. He noted that from what Ocean Engineering has put on ground, he is optimistic that some of the engineering designs would be done in country.

Purpose of visit

Our policy package in the energy sector is the boosting of the local content base. Ocean Engineering is one of the most important and known indigenous engineering companies as far as design, pipeline and other facilities are concerned.

The firm wrote a proposal on what it has on ground and my intention is to come and assess if it is capable of doing what it says it wanted to do so that when the time comes for inviting oil people we will not invite those that are not capable. I have gone round and I have seen what it has. The company is also working with other countries in the world in the area of subsea engineering. One of the things we are going to need very soon is a competent company that can produce pipeline engineering for the construction of our pipeline, for the construction of our central processing facilities and all facilities that are needed when it comes to gas infrastructure in Nigeria.

This is purely a Nigerian company. The have expatriates employed by them but most people here are Nigerians and they are competent. They trained them. Before you are selected, you must be brilliant and know what you are doing.

Nigerians, very competent

Any foreign oil company that says Nigerians are not competent is ignorant. They are brilliant Nigerians. Nigerians in the advanced countries are competent and doing most of these jobs to their host countries. A time has come that we have to realize our potential in this country. There are so many brilliant Nigerians performing well in overseas. We are trying to invite them by providing a conducive working environment so that they can do here what they are doing in another man’s country. If you go to India majority of the Indians are doing all these engineering works and their universities are well furnished to develop technically. In Nigeria, we are coming up because we have a listening president who knows where he is going.

The National Assembly is working towards bringing laws to back up the local content policy.

Gas infrastructure

In the past, attention was never given to gas infrastructure in this country. It has always been oil and nothing for gas. This president thought it wise to pay attention to the enormous resources in gas. Today, Nigeria is the seventh country in the world as regards gas production and we need infrastructure to harness this potential. That is why when we came on board we started working on it. I must thank NNPC because it has been working on this for years. On assumption of office I had to call on NNPC for us to put things together and present to Mr. President. When we did, we presented it to the Federal Executive Council. It was a brilliant idea it was approved and that is the gas masterplan. It tells you how we are going to gather all the gas that we have in this country.

That is what Trinidad and Tobago and Algeria did. It is not a project that you do one by one. There is no synergy in what we had before but now we are going to have a synergy now; we are going to gather all the gas in about three central processing facilities where and extend it through a pipeline to all parts of our country so that industries will grow. That is one of the primary objectives of this administration, which among other things is to supply gas to our domestic use. I am committed to that and we are going to get there.

End of gas flaring

In the past, we were told that gas flaring would end at an announced date but there was no concerted effort to follow it up. Now the government says we should have a pragmatic approach to end gas flaring and to know the programmes the oil companies have on ground in this direction. We are still working on that. That is why I have not made any pronouncement. We are together working it out.

Part of the gas masterplan is the supply obligation that the federal government has approved. There is a certain amount of gas required from every company that produces gas in this country for our domestic use. We have communicated that to them.

They are coming back with me with pragmatic approach and whether they can do this or not so that by the time we harness all these we shall announce it to Nigerians the date to end gas flaring. This time around, let us have a timetable on how we are going to end it. It is not an easy thing to do because it consumes a lot of money. I am not saying the December 2008 deadline is no longer feasible. We are working with the oil companies and have told them that this is the date we have for you tell us how you are going to actualize it. That is why we ask them to give us the programme on how they are to actualize this. If there are obstacles on the way to achieving this, they should let us know so that we fine-tune those things together and then arrive at specific date and if they do not comply with the date they will see what would happen.

Gas pricing

Gas price purchase agreement is one those things that we have brought up in this administration. NNPC and IOC have been working on that for the past months. If you don’t have an appropriate price for gas some investors who have interest probably won’t come. This is being worked out and we are thinking that very soon we should have come out with a concerted gas sales agreement that will address the issue of gas.

I am experienced in the oil industry and I know what it takes and that is why we are developing and achieving all these results. Take for example; the price of Liquefied Petroleum Gas in Nigeria before we came on board had hit the roof. It was about N7,000 for 12kg. It was unheard of. India does not have gas yet LPG for the same weight sales for about N700. I had to call all the LPG dealers and asked them why the price of gas is so high in Nigeria. I warned that if by last January or February the price does not crash something else must be done. Today, the price of LPG has come down to about N3,000 for the same quantity. It has to further go down. We are working on that. The only problem we have as regards LPG is logistics and infrastructure. We are putting all these things in place to make life easy for our people. Nobody will come and do it for us. We call ourselves a gas nation.

IPP and gas

The last regime did all it could to solve power problem. Many IPPs were conceived but along the line may be the attention was not paid on how to get gas to power the IPPs. When we came in, we realized that the IPPs we have need gas. The solution is that we have to build the infrastructure- pipeline, and gather the gas and these takes a lot of money. So what we have done is to mandate all the IOC to give us some gas out of what they produce, so that when the IPPs are ready, gas will be made available to them. One of the components of what we actually need is the OB OB line.

You have the gas in the East and most of the IPPs are in the West and North but there is no connectivity. How do you bring the gas without a pipeline? We are going to construct first of all the OB OB line that connects East to the West and the North. When that is done we will harness all the gas and send to different parts of this country. It is one of the areas that the Gas Masterplan is addressing. This will create a lot of employments, as industries will grow.

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