Stakeholders in the gas value chain have continued to react to the planned official launch of the Nigerian Gas Transportation Network Code ahead of the event scheduled to hold next Monday during the 3rd edition of Nigeria International Petroleum Summit in Abuja.
Daily Trust learnt that the Network Code, which is a set of rules that will guide the use of gas transportation system in the country, is a contractual framework between the network operator (transporter) and the users (shippers, buyers, suppliers) that will provide open and competitive access to gas transportation infrastructure.
The proposed Code will also guarantee gas pipeline integrity, open access to pipeline and common understanding on metering and provide a uniform platform in terms of guidelines for agreements between buyers and sellers which will ensure transparency and eliminate existing bottlenecks.
Industry players in the Nigerian Gas Association (NGA), the international oil companies (IOC), policy makers and consultants, agreed that introduction of gas network code will grant Open Access to third party use of gas pipelines on a non-discriminatory basis.
They also agreed that Network Code will remove the barriers affecting investments in gas transport infrastructure.
In his comments, an oil and gas consultant, Dr. Moyi Dahiru, said the code had become necessary, alleging that most of the pipelines are monopolised by the Nigerian Gas Company (NGC), a subsidiary of the NNPC and the international oil companies (IOCs), among others.
He said the gas policy, made Open Access a priority for all gas developers to use existing pipelines.
He explained: “The reason is that if you don’t do that, the IRR (internal rate of return) for each individual gas developer will probably not be realistic.
“Instead of building a new pipeline which means I have to get engineers to design the pipeline, do civil works, get the community on board and several others things which will cost in dollars or naira…why not allow me to use your pipeline and pay a tariff for using that pipeline”, Dahiru added.
He said the Network Code Open Access if implemented will help gas developers save cost.
Another industry expert, James Odiase, identified what he called critical issues that have prevented the policy from happening in the midstream sector.
“There is the issue of the fact that if you develop your facility, you have plans for it and therefore that plan may not have included the third party that is coming to ask for the use of the pipeline. Then there is the other issue of the requirement to share commercially sensitive information.
“Remember that unlike crude where there is a very liberalised market, in gas you are tied to a customer with a long term agreement and therefore if am coming to you to use your pipeline, the first question is who are you supplying, who are the off-takers and therefore sharing that commercially sensitive information is an issue,” he said.
It would be recalled that the Federal Executive Council (FEC) had in 2017 approved a National Gas Policy that announced that there will be Open Access to all pipelines and other essential midstream infrastructure, whether located offshore or onshore.
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