Govt should give tax holiday to gas companies – Emenike

The Head of Gas Ventures, Neconde Energy Limited, Chichi Emenike, in this interview with ’FEMI ASU, says Nigeria needs to encourage more projects to monetise its huge gas reserves and boost domestic supply

What are your thoughts on the Nigerian oil and gas industry?

What we have seen with time is that there has been a renewed focus on local content, and we are beginning to see Nigerian businesses that can do better in the oil and gas industry than the international oil companies that we have known over the years. Here at Neconde, I have been given the mandate to drive the gas business; Neconde has huge gas reserves. Part of the immediate mandate is to develop and completely monetise our associated gas. We’ve also got huge reserves of non-associated gas, which we have to develop.

It is a well-known fact that the country has huge gas reserves. Just last week, Italian oil major, Eni, announced that it had made a significant gas discovery in the Niger Delta. But there is still gas shortage in the domestic market. What is your view on this?

This is something we have always talked about. Most of the gas reserves are still trapped below the ground. We don’t have sufficient gas infrastructure. We have a gas master plan but we haven’t fully optimised it yet. We’ve got an environment that is not clear to investors yet, whether you’re an international or a local investor. We don’t have policies that are completely clear; that is not acceptable. We’ve got a myriad of other issues. These are some of the issues that we are dealing with, and these are some of the things that have held the gas industry down for some years now.

There are a couple of LNG projects that have been stalled. Given the growing competition in the global LNG market, do you think there is still prospect for these projects?

Those are the projects we need to monetise our gas resources. We should have LNG plants like the one in Bonny in other places in the country. The focus really is not just on gas for export; we also have a lot we can do with the gas internally. You have many industries that need to run on gas. We have issues with power. We need to begin to look at the power sector. There are a lot of regulations regarding the power sector that need to be looked at. This is to encourage investors to develop more gas. There are other investment destinations in Africa. For instance, Ghana does not have as much gas reserves as Nigeria but they’ve done a lot of tidying up. Mozambique is talking of an LNG plant today. Cameroun has delivered its first LNG. So what are we saying? It is time we get our act together. We talk a lot. Our gas policy has a leg in the Petroleum Industry Governance Bill as it is. There are other bills too that are also important that are waiting to be passed. Time is ticking. We need to pass the Petroleum Industry Bill.

What role is Neconde playing to ensure adequate supply of gas in the domestic market?

What we are working towards now is to eliminate gas flaring. We’ve already commercialised some of the associated gas and we have buyers. The short-term plan is to maximise our associated gas. We are putting in place more gas infrastructure; we currently have a central processing facility. We’re also looking at the non-associated gas because that is where the main focus is; that is where the big business is.

What is your company’s current gas production and what are your plans for the future?

Neconde is developing Oil Mining Lease 42 currently with its joint venture partners. We have what is called an asset management team. Currently, we’re producing about 40 million standard cubic feet of gas per day. Our plan is to increase our associated gas production to 80 million scf per day, and that requires putting in place more gas infrastructure. We currently have a central processing facility, and that still requires additional infrastructure, probably additional pipelines. We have off-takers who have also indicated interest. They are currently discussing with us. In the long term, we’re looking at the non-associated gas. Neconde is also looking at putting in place Liquefied Petroleum Gas infrastructure. The business plan that we are developing and I’m looking at currently also has consideration for the LPG.

We have a lot of the LPG in Nigeria but unfortunately the per-capital usage is small compared to other countries such as Ghana and Senegal. We shouldn’t have that; you know those figures. For a long time, most of the LPG Nigeria uses comes from the Nigerian NLG in Bonny to Lagos. I know the NLNG is committed to deepening the consumption of the LPG in the country; so, they deployed smaller vessels. There are so many things we are doing with our current operations to ensure that we maximise value for our shareholders and our lenders.


Source: Punch