Stakeholders Calls For Prioritization Of Midstream/Downstream Infrastructure Investment In Nigeria
By Grace Samuel
Stakeholders in the oil and gas sector have stressed the need for Nigeria to focus on downstream and midstream infrastructure to improve competitiveness.
The stakeholders who spoke at a function recently, highlighted the need for Nigeria to maintain sustainable gas policies amidst the energy transition and changing global oil and gas market.
While they recognize the significance of alternative energy sources like renewables in the long run, they believe that prioritizing gas is essential in the short and medium term.
The stakeholders emphasized that Nigeria is facing a unique obstacle as it needs funds to meet the essential needs of its population while also dealing with revenue challenges.
They pointed out that Nigeria relies heavily on oil and gas for a large part of its income, which makes it challenging to make a successful transition to renewable energy that also requires significant funding.
They further stressed the need for Nigeria to focus on effectively using its current energy sources, such as gas and hydro, which already have the necessary infrastructure in place.
They emphasized the significance of ensuring the consistent implementation of the Petroleum Industry Act (PIA) for the long-term stability of Nigeria’s oil and gas sector. They also noted that investors, both domestic and foreign, prioritize policy coherence and long-term projections when making investment decisions.
Habeeb Jaiyeola, a partner at PwC, stated that Nigeria currently has a completely deregulated petroleum downstream industry.
He emphasized the importance of efficient logistics in order to keep prices stable and suggested that the government should invest in infrastructure to support private sector logistics within the industry.
Jaiyeola also highlighted the need for collaboration between the government and private sector stakeholders to implement a national strategic stock.
The development of a strong energy sector that allows investors to make profits will also help in the advancement of other energy sources such as solar, wind, and biomass.
Additionally, Nigeria needs to prioritize efforts to achieve a circular economy, which emphasizes production, recycling, and reuse. Presently, Nigeria operates on a linear economy model that is not efficient in terms of resource utilization and energy conservation, according to the speaker.
Also, Kelvin Emmanuel, CEO of Diary Hills Limited, called for a change in Nigerian National Petroleum Company Limited’s business model, urging the company to gain expertise in operations in deep offshore areas in order to increase their share in production sharing contracts and reduce expenses in Joint Venture cash calls.
He also emphasized the government’s role in installing pressure and temperature sensors on pipelines to detect abnormal occurrences like pressure drops caused by hot tapping.
According to Emmanuel, this will enable security agencies quickly respond to attacks or diversions.
Additionally, he suggested that the government should not only focus on associated gas but also invest in JV-associated gas fields to increase the supply of feedstock for NLNG, floating LNG, and high transmission pipes for domestic and export use.
“I suggest that the Government not only focuses on associated gas, but also invests in Joint Venture (JV) associated gas fields to increase the amount of feedstock available for NLNG, floating LNG, and high transmission pipes for both domestic use and exports.
“It is crucial that the government moves forward immediately with the JV for the Nigeria Morocco Gas Pipeline (NMGP), as this will generate foreign exchange (FX) revenues that can stabilize the economy, reduce inflation, and have an impact on the government’s fiscal strategy,” he stated.