Despite N250bn intervention, gas production declines

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Despite N250bn intervention, gas production declines
Despite N250bn intervention, gas production declines

The production of natural gas in Nigeria witnessed a decline last year, despite the injection of a N250 billion intervention fund into fifteen companies, according to investigations by reporter.

An industry report from the Energy Institute in collaboration with KPMG revealed that Nigeria’s natural gas production experienced a reduction of 4 billion cubic feet meters between 2021 and 2022.

While the country’s gas production had been steadily increasing from 39 billion cubic feet meters in 2012 to 49 billion cubic feet meters in 2020, it took a sudden downturn to 45 billion cubic meters in 2021 and further dropped to 40 billion cubic meters last year.

The decline occurred despite the Federal Government’s N250 billion intervention fund through the Central Bank of Nigeria, with N130 billion allocated to 15 companies for the construction of Compressed Natural Gas (CNG) conversion centers.

The National Gas Expansion Program (NGEP), initiated by the Federal Government, aimed to promote CNG as the preferred transportation fuel and Liquefied Petroleum Gas (LPG) for domestic cooking, captive power, and small industrial complexes.

Despite the fund and the NGEP launch, the decline in natural gas production has raised concerns.

The fifteen beneficiary companies, including Dangote Oil Refinery, Nipco Gas Ltd, Nipco Plc, Hyde Energy Ltd, Lee Engineering and Construction Company, Pinnacle Oil and Gas FZE, Transit Gas Ltd, Amalgamated Oil Company Nig Ltd, First Modular Gas Systems Ltd, NOVAGAS Ltd, Greenville Liquefied Natural Gas Company, AP LPG Limited, MOB Integrated Services Limited, Delta State Government, and Gas Nexus Ltd, are set to face the Senate Committee on Gas on Thursday.

The summons by the Senate Committee, chaired by Jarigbe Agom Jarigbe, requests the companies to provide progress reports, project locations, and current project statuses during their appearance.

President of the Independent Petroleum Marketers Association of Nigeria, Chinedu Okoronkwo, expressed dissatisfaction with the exclusion of his members from the loan.

He asserted that if his members had received the funds, over a million vehicles could have been converted to CNG models by now.

As of August, the Nigeria Extractive Industries Transparency Initiative stated that Nigeria needed $20 billion annually to achieve its gas expansion plan and address the country’s gas infrastructure needs.