Nigerian oil and gas industry stakeholders have faulted moves by the Nigerian National Petroleum Corporation (NNPC) and some joint venture partners to commence the delivery of Liquefied Natural Gas (LNG) by trucks to power generation companies and industries in a new deal aimed at boosting capacity utilization of the real and electricity supply to businesses and homes.
The decision which was part of a -20-year Gas Sale Aggregation Agreement (GSAA) deal signed between the NNPC, Total Exploration and Production Nigeria, Gas Aggregation Company of Nigeria (GACN) and Greenville LNG Limited, if implemented will balloon road rehabilitation and maintenance cost by additional 30 percent according to civil engineering experts.
Under the new deal, which Nigeria’s Petroleum Resources Minister, Mr Emmanuel Ibe Kachikwu, said would minimise gas supply disruption to Gencos , about 750 trucks and other machinery that hitherto ran on diesel will now be fuelled by LNG while also delivery same to LNG plants across the country in bid to reduce dependence on petrol .
The initiative, according to Kachikwu also aims at ensuring adequate gas supply nationwide at uniform cost. The agreement will also ensure cleaner environment and create more jobs for Nigerians.
Under the agreement, Greenville LNG will introduce the first 100 per cent LNG fuelled trucks with a fleet of 750. It will also establish a series of LNG fuel stations across Nigeria on major highways.
Kachikwu, said the development was first of its kind in the history of Nigeria. According to him, gas will now be moved in trucks at cheaper cost than it was sold now that it is being transported through the pipelines that have often come under severe attacks by militants and other economic saboteurs.
The Minister said the use of pipelines will be minimal when the initiative takes off .
Outlining some of the benefits of the agreement t the signing ceremony, the Minister said, “this agreement will unlock huge economic opportunities for the country. It currently produces 2,200 cubic meters of gas even as it has the capacity to produce 5,000 scuf of gas,’’.
The Minister also stated that it will ensure the direct obligations of gas suppliers are promptly met considering that some of them have not been able to execute their mandate in several months.
“This initiative is part of our 7 Big Wins programme and since President Muhammadu Buhari came onboard, we were given the mandate to unlock the gas potential of the country and reduce dependence on oil.
This programme has been in the works for three years running. We set up different companies including the marketing arm of gas division of the NNPC. This project was also realised because of the calm we somewhat enjoy in the Niger Delta region. Without the relative peace, this cannot work. It is coming just few months after we launched the new gas policy.
We will ensure this succeeds and grows. So payment obligations and other contractual agreements will be respected so that all parties could discharge their duties as expected. We will ensure funding and payment won’t be an issue,” Kachikwu said.
Also speaking at the event, the Managing Director of Total Nigeria Exploration and Production (TENP) Nicozas Terraz, described the agreement as a good development for Nigerian gas market. He assured that all parties in the deal will abide by the rules of their engagement.
“Our mission is not only to produce energy but to ensure its supply too. We want to ensure supply of gas to domestic market,” he said.
Already one of the partners to the agreement, Greenville LNG, is encouraging fleet owners in Nigeria to take advantage of LNG to convert their trucks to LNG fuelled. It will also provide technical support through workshops to convert existing vehicles from diesel to LNG which can cover up to 1,200km in one fill.
But whether the fuel transporters and fleet owners would be ready to key into this new deal by a converting their trucks to transport gas as the agreement begins would be determined in the months ahead.
Notwithstanding the many benefits electricity consumers are expected to enjoy from the contract, some stakeholders are worried over its downside effects on the economy. They are alarmed for instance at the impending confusion the initiative would unleash on the nation’s highly degraded road network, considering the collateral damage an additional 750 heavy duty gas trucks would bring to bear on the roads.
According to the Minister of Power, Works and Housing, Mr. Babatunde Raji Fahola, Nigerian government has in over 55 years of independence constructed about 28,980km out of the 193,200km total length of its road network. This limitation, many have argued would pose severe challenges to the new gas supply agreement.
The Minister was not happy that Nigeria, a nation with the largest population and economy in sub-Saharan Africa, with an increasing demand for road transport network has a road sector that accounts for about 90 per cent of freight and passenger movements in the country due to the inadequacies of other modes of transportation
Meanwhile out of the over N400 billion approved for the Ministry of Power, Works and Housing in the 2017 budget about N200 billion is dedicated to road construction and rehabilitation works, even as experts expect about 30 percent increase in road maintenance cost.
Commenting on the 20 year gas aggregation deal, the President, Nigerian Gas Association (NGA), Mr. Dada Thomas, said pipelines and rail system remain the best transportation mode for moving gas from one location to the other.
Thomas said Nigerian roads are not in the best state for conveying goods, LNG and even passengers, stressing that movement of gas to longer distances were best done through pipelines, adding that what needed to be done was for government to provide effective security apparatus along the gas pipelines to minimise attacks by vandals.topics from