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AfrOil COMMENTARY AfrOil

Nigeria’s gas policy aims to reduce flaring (Photo: Danium Energy)

PIB envisions changes in

Nigeria’s domestic gas sector

The draft legislation aims to make domestic gas sales a more lucrative proposition

EVEN as the month of October nears its end, country’s abundant natural and associated gas
Nigeria’s government has remained optimistic resources. As such, it is hardly surprising that the
WHAT: about its chances of securing approval from both legislation now under discussion contains mul-
The PIB raises the do- houses of the National Assembly for the Petro- tiple provisions designed to promote domestic
mestic base price for gas leum Industry Bill (PIB) before the end of the gas consumption.
from current levels, but year. According to Africa Oil + Gas Report, these
it also offers discounts to This optimism does not appear to be mis- provisions will not benefit all users equally.
certain customers. placed, as the proposed oil and gas law has not Instead, they will offer advantages to gas-fired
lost momentum. The bill passed during its sec- thermal power plants (TPPs) and gas-based
WHY: ond reading in the Senate on October 20, and industrial consumers – namely, companies that
Officials in Abuja hope members of the House of Representatives began use gas as feedstock for the production of petro-
the new pricing regime the second reading on the same day. chemicals, fertiliser, methanol and the like.
will attract new invest-
ment to gas projects. Meanwhile, as the legislative process con- This advantage is evident in the domestic
tinues, more information about the PIB has base price for gas sales, which is being raised
WHAT NEXT: emerged. This essay will examine some of the from the current rate of $2.5 per million Btu to
The proposed chang- details related to the gas sector that have come $3.2 per mmBtu as of January 1, 2021, Africa Oil
es require Nigeria’s to light in recent days. + Gas Report noted. It explained that this price
government to pull off a floor would be applicable to TPPs, even as most
complicated balancing New pricing regime other consumers will have to pay at least $3.7
act. Nigeria’s government has proclaimed 2020 the per mmBtu, with the final cost of purchase to be
“Year of Gas” in a bid to promote the use of the negotiated with suppliers.

P4 www. NEWSBASE .com Week 42 21•October•2020