The Managing Director of the Niger Delta Power Holding Company (NDPHC) Limited, Mr. Chiedu Ugbo has advocated for a re-think in the current practice pricing domestic produced natural gas in foreign currency.
Ugbo who spoke at the 2023 Nigeria Energy Summit, held in Lagos said the cost of gas is prohibitive in Nigeria.
A statement from the company quoted him as saying: “I understand that producers have their own arguments but unfortunately, this is Nigeria and if Nigeria has over 200tcf in proven gas reserve, why is it so difficult to get gas? “
According to him, renewables may be the future of energy but as of now, Nigeria needs natural gas to power heavy industries.
In his view, some industries like those in the steel sector and some others cannot transit immediately to solar energy. They still need natural gas.
As such, “we still have a lot of opportunities especially in power generation to ensure the consumption of gas as we transit to renewables. There are also opportunities in homes for the use of natural gas in cooking and such.
However, “for gas to play an effective role as a transition fuel, certain challenges have to be dealt with.”
“In the power sector, we have serious problems with availability of gas. For example, NDPHC has over 2,000MW available generation capacity on the Western axis of the Niger all the way from Delta State to Ogun State and we need at least 600 million standard cubic feet of gas (scf) to power them. Incidentally, I just manage to get between 100 million and 120 million scf of gas. It is that bad. So, availability is a major challenge”.
Ugbo then advised that regulators in the electricity and oil and gas sector should intervene to provide succour and ensure generation of enough electricity for Nigerians.
“If we can find a means to reduce cost of gas at least for domestic consumption, that would help a lot. Gas should not be denominated in US dollar and then exposed to vagaries in the forex market.
He then nonetheless assured his audience that NDPHC will continue to strive to ensure that Nigerians get electricity supply despite the challenges.
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