May 30, 2024
Experts, Stakeholders call for collaboration on gas liquidity, pricing, others
– By Alison Godswill

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Experts, Stakeholders call for collaboration on gas liquidity, pricing, others

 
Experts and Stakeholders, who rose from the Nigerian Gas Association (NGA) Multilogues in Lagos, have called for the review of gas pricing, liquidity and other issues in order to achieve the sustainable development of the sector.

In a communiqué obtained by The Daily, http://www.thedaily-ng.com, they stated: “The multilogues recommended close collaboration among players and stakeholders  across  the  entire  industry  value  chain  to  urgently  reach consensus  on  a  pricing  framework  the  market  can  bear  but  which should  be  rewarding  enough  to  attract  growth  investments,  secure project  funding  and  sustain  supplies.

Any  pricing  model  to  be considered  must  take  into  full  cognizance,  the  peculiarities  of  the domestic operating environment. The  multilogues  also  posited  that  liquidity  issues  that  hamper  returns from  the  power  sector  be  speedily  resolved  to  address  legacy  debts and facilitate full recovery of gas revenues from the Nigerian Electricity Supply Industry.

The  multilogues  demanded  better  and  more  effective  policy,  fiscal and  regulatory environment required to make  gas industry operations in the country globally competitive.

“Gas policies in the  upstream industry, including asset  renewals, should guarantee  the  viability  of  gas  projects  to  balance  the  government’s revenue targets and commercial interest of investors. The  prevailing  transitional  pricing  regime  should  be  short-tenured  to enable early  migration of  transactions  to  full commercial liberalization and allow competition to address concerns of affordability.

The government should consider the use of direct subsidies to stimulate industrial  growth  rather  than  introduce  pricing  systems  that  distort market  operations.  Policies that affect investments should be clear enough to make investors determine recovery timelines.

“The  NGA  will  continue  to  drive  win-win  policy  advocacy  for  all stakeholders,  whilst  attracting  international  funding  for  local  gas projects.  In  addressing  the  urgent  need  for  sector  legislation  to  spur  wider development and the viability of the PIB in advancing the sector as has been anticipated  over  the  decades,  panelists and  speakers  extensively  discussed issues  in  the  speeches,  presentations  and  offered  exceptional  insights  and expert opinions for the benefit of the hundreds of participants who joined the discourse  online.

There  is  a  need  for  extensive  stakeholder  collaboration  and  interest alignment  to  progress  the  passage  of  the  new  PIB  and  secure  clear, provisions of the law that encourage industry growth should be matched with practical and well-funded implementation programmes.

“The PIB should provide competitive fiscal terms, weed out unnecessary operating  cost  components,  resolve  Deepwater  PSC  disputes,  and smoothen  out  the  transition  to  new  lease  administration.  The  fiscal provisions  in  the  new  PIB  should  be  modeled  against  global benchmarks  to  reduce  or  eliminate  operating  risks  and  boost  investor confidence.”

They also stated: “Inputs  into  the  new  bill  must  consider  the  varied  interests  and  seek  a common position in addressing all issues  that have been  raised  in the past 20 years of the PIB formulation. Emerging self-funding regulatory commissions and authorities proposed in the PIB should be underpinned by the entrenchment of transparency, accountability, and measurable performance parameters to avoid abuse of office and the whimsical imposition of levies and penalties. Regulatory changes that involve existing investments and active transactions should be implemented in phases to protect the commercial interests, avoid market distortions and guarantee returns for investors.”

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