The Federal Government threatened on Thursday that it will from October; impose heavy penalties on oil companies operating in Nigeria that did not initiate concrete efforts towards meeting their domestic gas supply obligation.
The Federal Executive Council had in April 2008 approved the domestic gas supply obligation policy, which allocated oil companies operating in Nigeria with specific quantities of gas, which they must make available to the domestic market, for utilisationfor power generation.
The policy was part of government’s agenda to end the perennial shortage of gas for domestic power supply.
Speaking in Abuja, during an interactive session with the chief executives of all the international oil companies operating in Nigeria, Minister of State Energy in-charge of Gas, Mr. Emmanuel Odusina said warned that if by the end of October 2008, there is no evidence of cooperation by the companies, government would have no choice but to consider further measures it deems necessary, including but not limited to putting a stop or suspension of all LNG projects targeting export of gas.
He indicated that President Umaru Yar’ Adua was unhappy with the apparent disregard by the IOC’s for the domestic gas supply obligation approved by the government since April.
He regretted that despite being issued with the obligation, no company has responded with credible supply and detailed work plans, but continue to focus their effort on export or other less important gas utilisation agenda.
“The Federal Government’s policy and regulations on gas supply to domestic market are not up for discussions or negotiations anymore,” he stressed.
Odusina further directed the companies to submit a detailed plan for domestic gas supply plan before the end of October 2008.
According to him, the plans shall include the required budgets and critical milestones and any other enablers subject to the boundary conditions of already established technical and pricing frameworks in order to have a comprehensive and efficient document for uninterrupted domestic supply of gas for power generation and distribution in the country.
He said that in the short term, the IOCs have been further directed to look deep into their respective operations and to expedite the processing of about 280 to 350 standard million square cubic feet of gas between now and the end of the year.
He added that the Nigerian National Petroleum Corporation will lead efforts with all the IOC’s to firm up the plans for the realisation of the 280 to 350 million standard cubic feet of gas per day with a view to having a report in by Thursday, October 2, 2008 for onward submission to Mr. President on Monday, October 6, 2008.