Electricity: FG offsets $120 million debt to Gas companies

Director, Decade of Gas Secretariat, Mr Ed. Ubong
Director, Decade of Gas Secretariat, Mr Ed. Ubong

The Federal Government said it had paid over 120 million dollars out of the 1.3 billion dollars owed Gas Suppliers in the country.

The Director, Decade of Gas Secretariat, Mr Ed. Ubong, on Thursday at the ongoing 7th Edition of the Nigeria International Energy Summit (NIES 2024), said the payment was to offset part of the debts.

Ubong spoke at a session tagged, “From Blue Print to Reality: Navigating Nigeria’s Gas Decade and Balanced Narrative on Energy Transitions.”

The session dwelt on gas policy, regulation and sustainable solutions in Liquefied Natural Gas (LNG), Autogas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) and Gas-to-Power.

He said the arrears gas producers were owed as at 2023 was about 1.3 billion dollars, but between October and the end of January 2024 the government had paid over 120 million dollars.

Ubong said the government was working on a framework that could liquidate the balance of the arrears.

“That’s a piece of work that is ongoing and we hope that it will be approved, and then the industry can move away from those issues,” he said.

He called on all the critical stakeholders in the oil and gas industry to assist the government in its quest to reposition the sector and the country to achieve economic prosperity.

“Sitting at the back of the earth is about 300 million to 600 million scuff of gas which can become available once the OB3 gas pipeline is completed.

“Once OB3 is completed, over 600 million scuff of gas will become available on the network feeding into the Ajeokuta-Kaduna-Kano (AKK) Gas Pipeline.

“We must build a gas capacity. The engineers, the technicians that will work in this new gas sector that we are looking at for the next eight months.

“And at the Secretariat, we are committed to that. We are looking for interns, we are looking for young people who are willing to join us and then provide their time and energy supporting bigger goals of the sector,” he said.

Also speaking, Mr Akachukwu Nwokedi, President Nigerian Gas Association (NGA), decried multiple taxation and levies and existing policy regulations which were affecting the cost of doing business.

“These have to stop and the approach needs to be harmonised and streamlined to enable businesses and encourage investment.

“We can also learn from countries like Australia and others that are very deliberate in implementing friendly policies. We need policies that will enhance Foreign Direct Investment in the gas space,” he said.

He described the Petroleum Industry Act (PIA) as a good legislative tool responsible for some positive steps in the sector.