National Gas Network Code Activates Gas Development
-By Said Abubakar
Target benefits of hosting the recently concluded 2020 Nigerian International Petroleum Summit (NIPS) in the Nigeria’s capital city of Abuja cannot be over-emphasized. Though Valuechain Magazine isn’t aiming at enumerating such benefits, it is however, imperative to harp on one of the cruxes of the occasion that places Nigeria in a better stead to put smiles in the faces of stakeholders of the oil and gas sector. For instance, Minister of State for Petroleum Resources, Chief Timipre Sylva, used the opportunity of the occasion to launch the National Gas Transportation Network Code which stipulates terms and guidelines for gas transportation, specifically applicable to gas producers, shippers and their agents.
Its provisions allow a window of six months for legacy agreements to migrate onto the network code while new and intending agreements are expected to align with the new code immediately.
Speaking on the importance of the code, Mr. Abel Nsa, Assistant Director, Department of Petroleum Resources (DPR), explained that the network code is a set of rules and contractual framework between producers and transporters.
“It provides transparency and a level playing field for everyone who wants to come into the gas system. It is like a protocol to move gas within the system,” Nsa said.
Mrs Audrey Joe-Ezigbo, President of the Nigerian Gas Association (NGA), expressed the pleasure of her association at the launching of the code, adding that it will help Nigeria become a mature gas market. “The code will attract more investors into pipeline infrastructure,” said Joe-Ezigbo.
Up till now, the Nigerian Gas Company (NGC) has remained a sole operator providing pipeline infrastructure in the Nigerian gas market.
In his own contribution, Dr. Salihu Jamari, Managing Director of the Nigerian Gas Company (NGC) noted that his company has been upgrading its facilities in expectation of the launching of the network code. “We are making sure that metering is available at every point in the network. The Nigerian Gas Company is very much aware of its role in the implementation of the network code,” Jamari stated.
According to data from the DPR, Nigeria has around 202 trillion cubic feet (TCF) of proven gas reserves plus about 600 TCF unproven gas reserves. Over the years, the country’s relatively smaller oil reserves have been the major focus for government and IOCs in the country, who find it easier and more profitable to produce oil rather than gas. Government, in recent years, stepped up its effort to support gas development, grow the economy by opening the gas market through export and encourage domestic use of gas in power generation and household use.
African Countries urged to Provide Structures for Energy Security
Also during the summit, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kolo Kyari, harped on the need for African countries to focus on providing structures that will ensure energy security for their citizens. He said the NNPC has a framework that works towards ensuring energy security in Nigeria.
“African countries must know that each must focus on building structures that ensure energy security for the citizens. NNPC is committed to that and has a framework to make sure that the needed energy is available for the needs of the country,” he stated.
The national oil company boss acknowledged the global clamor for energy transition from fossil fuels to renewable sources but, however, noted that hydrocarbons will continue to form the larger part of the energy mix in the foreseeable future.
“Several researches continue to confirm that by 2040, renewables will be contributing about 20 percent of the global energy mix. This implies that fossil fuels will still contribute at least 70 percent,” he said.
He therefore urged African countries, who are still mostly underdeveloped, to continue to utilize the hydrocarbon resources available to them to develop energy sources for their populace.
“The focus must be in making sure that the energy is clean. We have to use what we have. Today, oil is being found in unexpected places. This contributes to the growth of middle class consumers. And so demand for fuel will continue with increase in population and prosperity. Global demands will remain over 100 million barrels per day” he said, adding that African countries should focus, not solely on the clamour for renewables but largely on the need to deliver energy for the development of their people.
Also speaking, Chikezie Nwosu, Managing Director of Waltersmith Petroman, agreed that African countries have huge resource deposits, but are very low on resource consumption and consequently, low Gross Domestic Product (GDP) growth.
He called on African countries to focus more on consumption against export. “The key thing to do is to decarbonise fossil fuels. Africans must not focus on selling commodities but on converting the hydrocarbons into consumable products,” Nwosu stated.
Senior Account Representative of Huawei Enterprise Energy Business, Amusa Babatunde Adeyemi, said that legislation is important in addressing the issues of data vulnerability in the industry, adding that the ability of the different technologies used in different operations in the industry to inter-operate with one another will greatly reduce exposure and vulnerability.
Earlier, Dan David, Managing Director, CyberSocAfrica had revealed to the delegates at the summit that the use of technology, despite its benefits, also exposes the oil and gas industry to threats. “The oil and gas industry is marching towards digitalisation and adoption of new technologies. The use of new technology is also to check the attack of cyber security issues in order to make the industry more secure and safe,” David said.
The session highlighted the impact of technology, policy, social, and changes in business model on the demand and supply sides of the oil and gas business. It also suggested plausible scenarios that policy makers can adopt as a response to various challenges in managing emissions and investing in infrastructure.
Mr. Osagie Okunbor, Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum and Development Company (SPDC), stated that bankability is a way of reducing the risk involved in developing projects, noting that the availability of resources is just one step in the creation of wealth.
Participants concluded that government should formulate policy that will encourage more participation by the private investors by liberalising the sector through the passage of necessary bills like Petroleum Industry Bill (PIB), which is expected to free the market and promote favourable fiscal terms for both the government and the operators.
The Director of Department of Petroleum Resources (DPR), Sarki Auwalu, in his contribution, acknowledged that refining is key to government’s goal of making energy affordable, adding that “government wants to create the enabling environment for investors to come into the downstream sector.”
Lending his weight to the success of NIPS, the Technical Assistant (Gas Business & Policy), Minister of State for Petroleum Resources, Justice Derefaka, urged the federal government to develop policies and legislation that will help protect the oil and gas industry’s vital data against cyber-attack.
“Government needs to develop policies and legislature to address the threat to data. Use of information technology and operational technology exposes the industry and renders it vulnerable to cyber-attack” Derefaka told the audience.
According to him, sharing of intelligence among operators in the industry and simulating situations before cyber-attacks can help reduce vulnerability.
In his remarks during a ministerial session panel, the Secretary-General of African Petroleum Producers’ Organisation, Dr. Omar Farooq Ibrahim has advocated the strengthening of APPO in the light of the recent oil discoveries in Africa.
Dr. Farooq said although the organisation was formed to serve as a platform for co-operation, harmonization of knowledge and skills among African oil producing countries, admitted that not much was achieved in the organisation’s first 20 years of existence.
The African Petroleum Producers Association (APPA) was formed in Lagos championed by Nigeria in 1987 but had to change it name to African Petroleum Producers’ Organisation (APPO) in 2017 following renewed efforts to strengthen it with the comming on stream of more African countries to the league of petroleum producing nations, and to promote co-operation in petrochemical research and techonolgy in order to mitigate dependence on Western technology and market for oil export.
