The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday said that the performance of Nigeria’s domestic gas supply obligation reached 64.8 per cent between September 2021 and the same period in 2022 compared to 50.66 per cent achieved in 2020, a 14 per cent increment.
The Authority’s Chief Executive, Mr Farouk Ahmed, who spoke in Abuja at the 2023 Domestic Gas Demand Requirements (DGDR) workshop, explained that the 2022 gas demand requirement also marginally increased by 5.9 per cent per day over the determined 2021 national gas requirement.
However, he noted that despite the improved performance of 2021, the domestic gas market continues to experience significant challenges around infrastructural capacity constraints, payment assurance issues and long outstanding legacy debts of gas supplied to the power sector.
He listed other constraints as the poor performance of sanctity of contracts, constraints on the evacuation of generated power and low investment flows into the sector.
Ahmed assured that necessary preparations had been made to ensure that this year’s domestic gas demand requirements is coordinated in a productive and efficient manner.
“As at end of September 2021, the estimated performance of the domestic gas supply obligation was 64.8 per cent compared to 50.66 per cent achieved in 2020 (comparing annual total domestic supply obligation allocation to actual daily supply met).
“ The increased performance of 14 per cent in the preceding domestic gas year can be majorly attributed to the concerted efforts implemented by the regulator and all our stakeholders towards enhancing the performance of the market,” he stated.
He explained that in determining a realistic gas demand requirement for the establishment of the domestic gas supply obligation, the regulator had always conducted an industry-wide domestic gas market review workshop.
According to him, this offers stakeholders in the sector an opportunity to review the demand levels of natural gas in the domestic market; establish the critical enablers required for enhancing the performance of the market and ensuring the collaboration of all the key players in the critical segment of Nigeria’s economy.
Ahmed expressed the NMDPRA’s committment to ensuring that regulation is optimised across the gas value chain to enhance the market environment that accommodates all the players in the sector.
In his comments, the Manager, Gas Production and Flare Monitoring at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Jennis Anyanwu, expressed optimism that Nigeria can meet the 12.2 billion SCF of gas per day as outlined in the Nigerian ‘Decade of Gas’.
“Certainly, Nigeria can meet the deadlines set for the decade of gas. There is a high-powered political commitment to ensure that happens. The Nigerian government’s commitment to international treaties and organisations such as the Paris Accord, net zero commitments and flare-out by 2030 make the decade of gas aspirations and goals achievable.
“A notable one is the Nigerian Gas Flare Commercialisation Programme (NGFCP) re-launched in September 2022, that would see currently flared gas converted to useful products, thus making more gas available for local utilisation.
“There are many other upstream projects that are aimed at increasing the current gas supply and the PIA is a gas-friendly legislation is a huge enabler in this regard.
“Currently, Nigeria produces around between 7 and 8 billion SCF per day but with capacity to increase that production to 12.2 billion, which is the target of the decade of gas if the current momentum by the government continues in the next few years,” he explained
He also attributed the growth of gas supply by 14 per cent to regulatory efforts in driving compliance with allocation and periodic monitoring of gas producers’ performances.
He added: “We do not wait until the end of the year. Even though these reports are received daily to determine compliance level. The companies themselves are aware that gas is the transition fuel for Nigeria. So, it makes sense even for their corporate image to comply with initiatives like this.”
Anyanwu noted that gas flaring has been a challenge but finding use for flared gas has become imperative as the Petroleum Industry Act (PIA) has made some provisions for punitive measures for gas glaring.
“Most of the gas that was being flared now comes to the domestic market and that is part of what is driving the numbers. Many companies have completed their flare-out projects within the past two years under review.
“The Nigerian gas flare commercialisation programme 2022 which was re-launched on September 30th this year has been a major push as well. This programme ensures an increase in the supply of gas to the domestic market.,” he said.