Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, has said the federal government is planning to create an independent agency to regulate the gas industry.
Speaking at the ongoing conference organised by the Nigerian Gas Association, Kachikwu said the new agency would “cover the activities of the existing petroleum regulatory authorities as well as new responsibilities”.
Government would remain the policy maker but the “new independent petroleum regulatory authority” would be “established and empowered with sufficient capacity to regulate the petroleum industry”, according to the Minister.
Nigeria has the world’s ninth-largest proven gas reserves, at 187 trillion cubic feet (tcf).
However, the country has been unable to harness its gas full potential.
Since the beginning of the year, the country’s oil and gas pipelines have also suffered vandalisation from oil militants, resulting in shortage of gas even for its power sector.
Currently, Nigeria has a regulatory agency, the Department of Petroleum Resources (DPR) that oversees the activities in the oil and gas industry.
“It will be responsible for the economic, competition, technical, and safety regulation of the gas sector and shall have licensing, investigative, monitoring and dispute resolution powers,” he said.
He said the plans were contained in the petroleum industry bill – long-awaited legislation to overhaul the petroleum sector that has been stuck in parliament for a decade – that was being drafted.
Kachikwu said most of the investment required to overhaul the gas industry would be drawn from the private sector.
Meanwhile, the Nigerian National Petroleum Corporation (NNPC) also said on Monday that about $51 billion investment opportunities exist today in the midstream and downstream gas sector to achieve the growth phase in the Industry in Nigeria.
According to the Group Managing Director of the NNPC, Dr. Maikanti Baru, about $35.4 billion investment will be required in the gas exploration and production activities, power plants projects, fertilizer plants, virtual pipelines and flare gas commercialization initiatives.
The GMD added that $16 billion investment will also be needed in the Free Trade Zones (FTZ) infrastructure development and concessioning, port infrastructure, central gas processing facilities, gas transmission, LPG plants, real estate development, pipe milling and local fabrication yards among others.
Dr. Baru stated that some of the key enablers that will be required for the growth of the gas sector include clear definition of boundaries between upstream, midstream and downstream sectors, appropriate pricing structure and guarantees for payment, host communities engagement and conducive environment for investors.
“Beyond growing gas for power sector, there has been a strategic positioning of the sector to support massive gas based industrialization. The intent is to position Nigeria as a regional hub for gas based industries such as fertilizer, methanol, petrochemicals, central processing facilities, etc. The first of this effort is the planned 30 square kilometer gas based industrial park in Delta State. This will be Africa’s largest purpose built gas park supporting gas based industries,” Dr. Baru said.
According to him, to bridge the huge gas supply gap, some strategic synergy opportunities for gas development were identified amongst the Joint Ventures (JVs), Production Sharing Contracts (PSCs) and independent operators which when pursued and implemented will not only bridge the unforeseen long term shortfall in gas supply but will also enable the nation to meet its gas aspiration.
The NNPC helmsman noted that seven key big bang gas development projects have been identified from the strategic synergy opportunities to deliver about 3.4 billion cubic feet of gas per day to bridge the foreseen medium term supply gap by 2020.

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