The Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, has absolved the Bola Tinubu administration of blame on the failed attempt by the Dangote industries to build a 1,200-kilometer subsea gas pipeline.
He also stated that there is no provision in the Petroleum Industry Act, or its predecessor policies or legislation, that discourages private sector investment in gas infrastructure.
The minister clarified this in a statement issued by his spokesman, Louis Ibah, on Tuesday in Abuja.
The Vice President of Dangote Industries, Devakumar Edwin, had alleged during a webinar hosted by Nairametrics last week that government policies in the upstream, midstream and downstream sectors frustrated policies that bring gas from the sea to the shore.
According to him, another government policy that prevented them from executing the project was the government’s ownership of gas pipelines across the country regardless of who built them.
“We wanted to invest in a network of 1,200km of subsea gas pipeline to bring the gas to the shore, and our idea was not to export it as NLNG.
“The gas pipeline was supposed to bring in 2 billion SCF of gas. We did a one-year study by hiring two ships to identify the route through which we lay the subsea gas pipeline so that the gas could be collected and evacuated. But then, the government’s policy was that there could be one player upstream, midstream and downstream. We were trying to find a solution to that, but the government said all gas pipelines, once you build them, you’ll have them over to the Nigeria Gas company. So that is how the project was abandoned,” he noted during the webinar.
In response, the minister explained that the company’s decision to build or abandon the project was solely a business decision and was not caused by the policies of the current administration.
The statement read, “The attention of the Honourable Minister of State Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo has been drawn to the recent statement attributed to the VP of Oil and Gas of Dangote Group regarding abandoning plans to build a 1,200km subsea gas pipeline due to government policies.
“Hon. Ekpo notes that the decision to build or abandon the project was solely a business decision of the Dangote Group, taken long before the inauguration of the President Bola Ahmed Tinubu-led administration.”
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Continuing, Ekpo said the current administration is diligently working to enhance infrastructure investment in the gas sector by fostering an environment that attracts investors willing to fund projects.
“The Federal Government, under President Tinubu, is committed to creating an environment that encourages investors who are willing to invest in projects in the Gas Value chain.
“As a matter of fact, the Federal Government has taken deliberate steps over the years to encourage and stimulate investment in the Gas Sector by approving various policies, such as the Gas Pricing & Domestic Demand Regulations (2023), the Natural Gas Pipeline Tariff Regulations (2023), the Nigerian Gas Transportation Network Code, the National Nigerian Gas Masterplan, the National Gas Policy (2017) and the Petroleum Industry Act 2021.
“These policies and laws provide a conducive environment for private sector investment in domestic gas development.
“The PIA established the Midstream and Downstream Gas Infrastructure Fund to support more private sector investment in gas infrastructure development,” he added.
“Contrary to the view expressed by the VP Oil and Gas of Dangote Group, there is no provision in the PIA, or its predecessor policies and/or legislation, that discourages private sector investment in gas infrastructure.
“The PIA offers significant incentives for private entities to invest in the Gas Midstream and Downstream sectors. The Federal Government encourages private investment in gas infrastructure development, and several projects have been commissioned under President Tinubu’s administration.
“Notable examples of the positive impact of the FGN’s concerted effort to stimulate private sector investment in the Gas value chain include the resolution of gas supply issues to major projects like the Geometric Power Aba Limited Power Plant and the Brass Fertilizer and Petrochemical Company Limited demonstrates its support for local investors, with groundbreaking novel approaches to resolving issues.
“The Hon. Minister of State Petroleum Resources (Gas) wishes to reiterate that any private entity interested in investing in the Gas Midstream and Downstream sectors is free to do so, with government incentives available to encourage investments that contribute to national economic growth and development,” the statement concluded.
