Tag: NMDPRA

• …FG allows gas producers to take their debts from royalty payments

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Thursday bemoaned the slow progress made in the country’s electricity generation in the last 20 years, lamenting that it has only increased from 4,500MW to 5,000MW in two decades.

In his regulatory address on the “National Gas Day: Unlocking Nigeria’s Gas Advantage for Power, Industry and Growth,” at the ongoing 9th Nigerian International Energy Summit (NIES) in Abuja, the NMDPRA Chief Executive Officer, Engr. Saidu Mohammed expressed dissatisfaction that 25 years after the Olusegun Obasanjo administration’s record of 4,500MW generation, the country is still hovering around 5,000MW.

His words, “About 20 years ago or more, when I was a younger engineer operating a department of a Nigerian gas company, I remember, I think it was the first year or second year of Obasanjo’s regime, we celebrated 4,500 megawatts of electricity generated at that time. 25 years later, we are still hovering around 5,000 megawatts.”

He said, unfortunately, Nigeria has been battling with the challenge of gas to power over the years, despite handing over the Power Holding Company (PHCN) to private operators.

“We have been talking of gas to power, for us actually, some of us grew in it. As younger engineers, we have been talking about gas to PHCN to the privatized companies, and unfortunately, in Nigeria, we are still hovering around the same,” said the NMDPRA boss.

According to him, the Nigerian Electricity Supply Industry (NESI) is not held down by a lack of generating capacity because it has capacity for 13,000MW.

He said only a little of the constraint is transmission-induced.

Mohammed said, “It is rather unfortunate that we are still hovering around 5,000 megawatts or so. Not because there is no generating capacity, there is up to 13,000 megawatts. There is a little bit more constraint in terms of wheeling capacity.”

On gas shortage, he said, despite the country’s over 200 trillion cubic feet reserve, only 8 billion standard cubic feet is produced for utilization.

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The NMDPRA boss said the complaint of the power-generating companies has been a lack of gas.

He asked the generators how much they requested that was not delivered to them.

Gas, according to him, is not just an energy commodity; it is an economic enabler.

He added that without gas, there is no sustainable power.

For increased gas supply, Mohammed sought improved gas prices and transparency.

He said Section 167 mandates the NMDPRA to determine the base price and also be transparent in determining the gas transportation tariff.

According to him, NMDPRA will continue in its efforts to strengthen the discipline on that network through the operationalization of the gas network code.

He stressed, “Gone are the days when gas will just be supplied from base and river. Gone are the days when the operator of the network will not explain to us the losses.”

The Petroleum Industry Act (PIA), he said, recognizes pricing in gas and the power to determine gas to power, which solely lies with the NMDPRA.

The NMDPRA, he said, is also to determine the rate of the gas-based industries and a capped price for the commercials.

Mohammed said the Authority is deliberately moving from a control-based regulator culture to an enabling and performance-driven framework. He stressed that domestic gas supply is a priority and NMDPRA will continue working with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce the domestic gas supply obligations.

He added that NMDPRA shall determine the domestic gas demand requirement, which will form the basis of the obligation.

Speaking in a panel session tagged “The Road Ahead: Finance, Gas, Media Sustainability,” the Decade of Gas Coordinator, Mr. Ed Ubong, insisted the government does not want to owe gas producers.

He said it means that gas producers must pay for the gas they consume or demand.

He revealed that, consequently, the office has just closed the bid round to raise additional financing to be able to defray the gas sector debts.

Ubong said President Bola Ahmed Tinubu had approved for upstream producers to be able to take their debts from royalty payments.

He added, “It really doesn’t make sense for a gas producer to continue to give government royalties when the government is doing that. So there’s been a conversation there, finally approved by the governors and the president. There is a small net that allows you to keep producing gas.”

He said the NNPCL, NUPRC, and gas producers have worked out the method for the payment of the royalties.

Ubong said, “If I owe you and I have not paid you, please take a small part of it before you pay royalties. And that has been worked on by the NUPRC, NNPC, and all these other gas producers.”

• Tinubu’s subsidy removal paying off, says Mohammed

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called on the private sector to pump an additional $30bn to $50bn into the midstream petroleum sector.

The Chief Executive of NMDPRA, Saidu Mohammed, who spoke after concluding his three-day tour of facilities in Rivers State at the weekend, also said President Bola Ahmed Tinubu’s bold move of removing petroleum subsidies had rejuvenated the sector.

Mohammed said, “I said two days ago that the midstream sector alone will require about 30 billion to 50 billion dollars investment. And those investments can only come from the private sector, not the government anymore.

“So, as an authority, as a regulator, what we will do is to make sure that we lay down the desired enablers for them to operate and attract the investment that Nigeria needs.

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“But first of all, we have to improve how we do things, and the improvement can be seen here in a world-class facility being operated by Nigerians, and that is the way to go”.

Mohammed said the authority was impressed to see fully integrated facilities designed, built, operated, and fully funded by Nigerians.

The Chief Executive, who toured Aradel Holding PLC, lauded the company for meeting the standard, saying the firm’s fully integrated facility was a demonstration that Nigerians could play a big role in the sector.

Speaking about Aradel’s operation of full Nigerian content, he said: “They have been sending gas to NLNG for about 13 years now. They have also built a refinery of about 11,000 barrels per day. And we have also seen what they have done with the gas in terms of a virtual pipeline, where they are getting compressed natural gas that is taken from here and serves many parts of Nigeria.

“So, holistically, we look at the energy requirement, and a lot of energy requirements have been met by this single asset here. So what we desire to see is more and more of this kind of assets, and that’s what I keep on saying that the midstream sector is”.

Mohammed said the country required more refineries to meet not only local demands but also serve the entire African continent, the United States of America, and Europe.

He said beyond the fuel and the AGO, the companies were expected to convert gas to other valuable products like LPG, adding that the goal was to have the entire petroleum value chain run by Nigerians.

“Nigeria has enough market for petroleum products, they have enough market for the gas, and we need cleaner and cleaner energy”, he said.

Mohammed noted that the country was not far away from affordable energy, adding that the goal was to ensure an ample supply of petroleum products.

He said, “I don’t think Nigerians are very much away from affordable energy, but what we are trying to do is to make sure that an ample supply is there. Ample supply, as basic economics says, the more supply you have, the lower the price it becomes. And that’s where we desire to be.

“You can see how we demonstrated it on PMS. You can see how prices of PMS have gone from 1,000 something to today, we are getting it at about 800, and what have you. And that is what competition brings.

“That as long as we are not subsidizing any segment of the uh business, we will get the desired goal. And the desired goal is to make sure that we have an ample supply of whatever commodity it is. Whether it is gas or gasoline at an affordable rate, and the affordable rate can only come through competition”.

Mohammed observed that President Tinubu’s bold move of removing subsidies has propelled the astronomical growth of the sector.

He said, “No more subsidy has propelled the private sector to come in. And we will continue to build on that. So, the support of Mr. President and governors and all other government agencies is not in doubt anyway”.

In his remarks, the Managing Director and Chief Executive Officer of Aradel Holding PLC, Mr Adegbite Falade, said the visit of NMDPRA was the biggest encouragement the firm could get as an operator.

He said, “As operators, we are not overwhelmed. We see the demand; we see the market, and all we are trying to do is to continue to make those investments that allow us to meet the demand. And the demand is huge. And we have received support from the regulator. We have seen all kinds of support that continues to make our operations grow from one stage to another.

“It is a great and worthy space for fellow investors and operators to come into. And the more we are, the more we build on the redundancy and the resilience of our energy security as a nation.

“We are committed to that course. We are looking at our capacity, and we are just projecting to grow it from one level to another. We are not overwhelmed, but we are doing our best to be part of that solution for energy security.”

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said that the President Bola Tinubu’s administration is accelerating gas distribution to drive industrialisation and lower production cost nationwide.

Authority Chief Executive of the NMDPRA, Mr. Saidu Mohammed spoke on Friday in Port Harcourt, Rivers State, during an inspection of petroleum and gas facilities in Rivers.

Mohammed said  he had chosen a Spanish firm CACCHD as one of the gas distributors in the Southsouth adding that the company was actively operating in Port Harcourt, Rivers State.

He said the authority was interested in engaging operators across the midstream and downstream segments while providing the necessary regulatory support to achieve desired outcomes.

He said the inspection of facilities formed part of the Federal Government’s commitment to the Decade of Gas initiative, designed to  maximise the country’s vast gas resources.

Mohammed said expanding domestic utilisation required robust distribution networks capable of delivering energy efficiently to industries and consumers.

He said: “Distribution networks are critical to industrialisation because industries thrive when gas is available.

“Gas provides a cleaner and more efficient energy source that lowers production costs and ultimately reduces consumer prices,” Mohammed said.

He noted that the Federal Government’s goal was to deploy activities across the oil and gas value chain to drive industrial growth.

The NMDPRA boss said the government’s priority was to deepen domestic gas utilisation alongside exports to strengthen the national economy.

He said the regulator would continue to support gas distributors and other midstream operators to ensure orderly expansion within transparent and clearly defined technical and commercial frameworks.

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He said: Inspecting these facilities underscores the government’s resolve to reposition the gas sector as a catalyst for industrial growth and national prosperity. Transparency remains central to our mandate under the Petroleum Industry Act (PIA)”.

Mohammed disclosed that the authority was in the process of mapping the entire country for the allocation of Gas Distribution Licences.

He said licensed gas distribution companies would operate within defined franchise areas to expand gas penetration nationwide.

According to him, where transmission pipelines are unavailable, the authority would deploy virtual gas distribution through Compressed Natural Gas (CNG).

He said: “These operators may appear small, but they are vital to the government’s aspiration of delivering gas to every corner of the country, particularly industrial hubs.”

Mohammed noted that industrialisation remained key to national development and economic recovery, adding that the government was working to enhance gas penetration through increased access to appliances.

He explained that while the authority did not provide appliances such as gas cylinders, it ensured that facilities met required standards from production to final consumption.

Mohammed warned that scarcity would inevitably drive higher prices, stressing that increased supply was essential to achieving affordable energy costs.

According to him, the authority would deploy all regulatory powers granted under the PIA to support operators and ensure gas availability nationwide.

“Our goal is to deliver petroleum gas at the lowest possible cost, from production through transportation to distribution,” he concluded.

The delegation inspected facilities operated by Stockgap Fuels Limited, Matrix Petrochemical Limited and Central Horizon Gas Company Limited to assess their operational standards.

In his remarks, Dr Stanley Ohamarije, Chairman of Stockgap Limited, said the company planned to inject 5 million gas cylinders into the market over the next five years.

Ohamarije said the investment would support the government’s 10-million-cylinder target and deepen gas penetration, noting that Stockgap’s plant has a production capacity of 2,500 cylinders per hour.

He added that the initiative reflected the company’s commitment to improving access to gas for Nigerians and supporting national industrial growth.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said that President Bola Tinubu’s administration is accelerating gas distribution to drive industrialisation and lower production costs nationwide.

Authority Chief Executive of the NMDPRA, Mr Saidu Mohammed, spoke on Friday in Port Harcourt, Rivers State, during an inspection of petroleum and gas facilities in Rivers.

Mohammed had chosen a Spanish firm, CACCHD, as one of the gas distributors in the Southsouth, adding that the company was actively operating in Port Harcourt, Rivers State.

He said the authority was interested in engaging operators across the midstream and downstream segments while providing the necessary regulatory support to achieve desired outcomes.

He said the inspection of facilities formed part of the Federal Government’s commitment to the Decade of Gas initiative, designed to maximise the country’s vast gas resources.

Mohammed said expanding domestic utilisation required robust distribution networks capable of delivering energy efficiently to industries and consumers.

He said, “Distribution networks are critical to industrialisation because industries thrive when gas is available.

“Gas provides a cleaner and more efficient energy source that lowers production costs and ultimately reduces consumer prices,” Mohammed said.

He noted that the Federal Government’s goal was to deploy activities across the oil and gas value chain to drive industrial growth.

The NMDPRA boss said government priority was to deepen domestic gas utilisation alongside exports to strengthen the national economy.

He said the regulator would continue to support gas distributors and other midstream operators to ensure orderly expansion within transparent and clearly defined technical and commercial frameworks.

He said, “Inspecting these facilities underscores the government’s resolve to reposition the gas sector as a catalyst for industrial growth and national prosperity. Transparency remains central to our mandate under the Petroleum Industry Act (PIA)”.

Mohammed disclosed that the authority was in the process of mapping the entire country for the allocation of Gas Distribution Licences.

He said licensed gas distribution companies would operate within defined franchise areas to expand gas penetration nationwide.

According to him, where transmission pipelines are unavailable, the authority would deploy virtual gas distribution through Compressed Natural Gas (CNG).

He said, “These operators may appear small, but they are vital to the government’s aspiration of delivering gas to every corner of the country, particularly industrial hubs”.

Mohammed noted that industrialisation remained key to national development and economic recovery, adding that the government was working to enhance gas penetration through increased access to appliances.

He explained that while the authority did not provide appliances such as gas cylinders, it ensured that facilities met required standards from production to final consumption.

Mohammed warned that scarcity would inevitably drive higher prices, stressing that increased supply was essential to achieving affordable energy costs.

According to him, the authority would deploy all regulatory powers granted under the PIA to support operators and ensure gas availability nationwide.

“Our goal is to deliver petroleum gas at the lowest possible cost, from production through transportation to distribution,” he concluded.

The delegation inspected facilities operated by Stockgap Fuels Limited, Matrix Petrochemical Limited, and Central Horizon Gas Company Limited to assess their operational standards.

In his remarks, Dr Stanley Ohamarije, Chairman of Stockgap Limited, said the company planned to inject 5 million gas cylinders into the market over the next five years.

Ohamarije said the investment would support the government’s 10-million-cylinder target and deepen gas penetration, noting that Stockgap’s plant has a production capacity of 2,500 cylinders per hour.

He added that the initiative reflected the company’s commitment to improving access to gas for Nigerians and supporting national industrial growth.