Gas producers have said that the current gas pricing in the country remains a significant drawback to investment. This is coming in the midst of growing demand for natural gas in the country, especially for power generation.
The gas producers including Shell, Frontier Oil Limited, Seven Energy and Oando Plc, reiterated the need for stable regulatory, legal and fiscal framework to encourage more gas projects in the country.
Nigeria is estimated to have at least 188 trillion cubic feet in natural gas reserves, making it the most endowed African country in terms of gas reserves. But a significant amount of the country’s gross natural gas production is flared because of lack of adequate infrastructure to capture the gas produced with oil, known as associated gas.
The country requires investments of between $1bn and $2bn annually in gas pipelines and processing plants, especially as it looks to drive monetisation of its gas reserves through the production of power or fuel, according to the United States’ Energy Information Administration.
The Federal Government had recently increased the price of domestic gas for power generation from $1.5 per thousand cubic feet to $2.5 per mcf and $0.80 per mcf as transportation costs for new capacity.