Energy experts have called for accountability in the implementation of Nigeria’s decade of gas plans and in funding ambitious gas infrastructure projects.
The call was made on Monday in Abuja during a policy dialogue on Nigeria’s Decade of Gas Plans, organised by the Africa Initiative for Transparency, Accountability and Responsible Leadership (AfriTal) in partnership with the Natural Resource Governance Institute (NRGI).
According to the experts, with most foreign banks and investors moving away from carbon-emitting fossil fuels, Nigeria would struggle to raise funds for its gas projects and therefore, accountability is needed.
Presenting the global outlook of investment in gas projects, Aaron Sayne, lead, domestic energy transition at NRGI, explained that while the global policy on energy transition was unfair to Nigeria and other African countries, it was a reality that Nigeria had to consider in pushing its gas investments.
Sayne noted that developing gas was particularly problematic because it was not as profitable as crude oil and many investors were already moving away from gas to power projects.
“First, let’s break up the different kinds of infrastructure Nigeria needs, the right type, and focus on the infrastructure for extracting gas on the ground first from a financing perspective. The first thing to answer is who is going to bring the capital and the expertise that’s needed to get the gas on the table.
He noted that while international oil companies (IOCs) were gradually scaling down their gas business and handing them over to Nigerian companies, the capacity of these companies to access foreign capital was limited.
“Investors see Nigeria gas investment as high risk because of naira instability and inflation.”
Also speaking, the executive secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Ogbonnaya Orji, however, noted that the midstream and downstream infrastructure fund provided for in the Petroleum Industry Act (PIA) creates an opportunity to fund Nigeria’s gas infrastructure if a robust transparency mechanism can be implemented to monitor the process closely.
Orji also added that NEITI “recommends a strong team of experts to assess the opportunities available within the gas sector to boost the economy and achieve energy access. The right policy and politics will send strong positive signals to investors to move into the gas sector”.
AfriTAL’s executive director, Dr. Louis Ogbeifun who spoke earlier noted that if the government’s intentions as contained in the decade of the gas plan were effectively implemented, “Nigeria is expected to witness a vast gas infrastructural development during the period”.
Ogbeifun said part of “the stepping stones toward achieving the goals of the decade of gas is the construction of the 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, which would transport about two billion cubic feet of natural gas per day from Ajaokuta to power plants in Abuja, Kaduna, Kano and other plants in the Northern axis of the country.
The good news about AKK is that the NNPCL seems to be funding the project and has spent over $1 billion. This and other initiatives are also aimed at deepening the usage of LPG and CNG in the country and ultimately expanding the autogas policy, which would reduce dependency on petrol as our mainstay for transportation in the long run”.