SAN FRANCISCO, September 03, (THEWILL) –
In a bid to boost capacity utilization of electricity supply to businesses and homes and reduce dependence on petrol, the Nigerian National Petroleum Corporation, NNPC, has struck a new deal with some joint venture partners to commence the delivery of Liquefied Natural Gas, LNG, by trucks to power generation companies and industries.
The decision which comes as part of a 20-year Gas Sale Aggregation Agreement, GSAA, deal signed between the NNPC, Total Exploration and Production Nigeria, Gas Aggregation Company of Nigeria, GACN, and Greenville LNG Limited, will see about 750 trucks and other machinery which hitherto ran on diesel now being fuelled by LNG and delivering same to LNG plants across the country.
Assuring that the agreement would minimise disruption in gas supply to Gencos, the Minister of state for Petroleum Resources, Dr. Ibe Kachikwu said at an event where the agreement was unveiled, the initiative also aims at ensuring adequate gas supply nationwide at uniform cost, and will also ensure cleaner environment and create more jobs for Nigerians.
The new deal will see Greenville LNG introduce the first 100 per cent LNG fuelled trucks with a fleet of 750, and would also establish a series of LNG fuel stations across Nigeria on major highways.
Kachikwu stated that gas will now be moved in trucks at cheaper cost than it was sold now that it is being transported through the pipelines that have often come under severe attacks by militants and other economic saboteurs. He added that the use of pipelines will be minimal when the initiative takes off.
But stakeholders are already raising the red flag, warning that an implementation of the agreement will spike the cost of road rehabilitation and maintenance by additional 30 per cent. This was as the President of the Nigerian Gas Association, NGA, Mr. Dada Thomas, said pipelines and rail system remain the best transportation mode for moving gas from one location to the other.
The stakeholders, who are worried over the downside effects of the 20 year gas aggregation deal on the Nigerian economy, are concerned over the impending confusion the initiative would unleash on the country’s highly degraded road network, considering the collateral damage an additional 750 heavy duty gas trucks would bring to bear on the roads.
However, outlining some of the benefits of the agreement at public display of the agreement at the weekend, the Petroleum minister said, “this agreement will unlock huge economic opportunities for the country. It currently produces 2,200 cubic meters of gas even as it has the capacity to produce 5,000 scuf of gas”.
He also stated that it will ensure the direct obligations of gas suppliers are promptly met considering that some of them have not been able to execute their mandate in several months.
According to him, “This initiative is part of our seven Big Wins programme and since President Muhammadu Buhari came onboard, we were given the mandate to unlock the gas potential of the country and reduce dependence on oil.
“This programme has been in the works for three years running. We set up different companies including the marketing arm of gas division of the NNPC. This project was also realised because of the calm we somewhat enjoy in the Niger Delta region. Without the relative peace, this cannot work. It is coming just few months after we launched the new gas policy.
“We will ensure this succeeds and grows. So payment obligations and other contractual agreements will be respected so that all parties could discharge their duties as expected. We will ensure funding and payment won’t be an issue,” Kachikwu said.
Also speaking at the event, the Managing Director of Total Nigeria Exploration and Production, TENP, Nicozas Terraz, described the agreement as a good development for Nigerian gas market, assuring that all parties in the deal will abide by the rules of their engagement.
“Our mission is not only to produce e
