Group Managing Director of Nestoil Limited Dr Ernest Obiejesi said Power sector holds the key to stimulating growth in the domestic market.
Dr Obiejesi spoke at the 4th Nigeria Gas Conference which held in Abuja.
The Nestoil boss said the gas supply industry in Nigeria will experience a boom if the liquidity issues in the power sector were fixed. He explained that the Power sector accounts for over 80% of the domestic gas off take market.
According to him, liquidity issues in the Power sector means that gas producers are owed huge sums of money for gas they have supplied. Dr Obiejesi said this situation is a huge disincentive for gas producers to invest heavily in any form of gas gathering infrastructure.
The Nestoil Group Managing Director commended the Federal Government for the recent Gas Flaring Regulation embedded in the 2017 Gas Policy, which he described as an audacious and innovative step by Government to discourage gas flaring.
He said this initiative was however not far reaching enough. According to him, a permanent solution would be to address the liquidity issues in the downstream and power sectors to encourage much needed investments in gas gathering infrastructure that would eliminate gas flaring.
“Everyone agrees that a willing-buyer-willing seller arrangement is what will ultimately unbundle the Gas industry in Nigeria and across the West Coast but Government must be ready to make the right seed-investments and take the tough decisions that will enable the gas supply market grow into maturity,” said Dr Obiejesi.
The Group Managing Director of Nestoil urged Government to continue to encourage indigenous players in the Oil and Gas industry. “OML 42, which we acquired in 2011 was fraught with a lot of challenges at the time it was sold by the IOCs. We are proud to announce however that Gas production of 40MMScf per day is set to be introduced to the domestic gas supply network by the end of this week with another 40MMScf per day being targeted for end-November 2018 for a total of 80MMScf per day by the end of this year”.
Nestoil is Nigeria’s largest indigenous Engineering, Procurement, Construction and Commissioning (EPCC) Company in the Oil and Gas sector and has been a significant contributor to the industry since inception in 1991. With over 1,500 direct employees, Nestoil continues to redefine industry standards in Pipeline Construction, Repairs and Maintenance with associated facilities for Dredging, River Crossing and Shoreline Protection. Its sister company Neconde is an Oil exploration and production company.
