The former Minister of Petroleum Resources, Mr Odein Ajumogobia, has said the Federal Government and the International Oil Companies (IOCs) that operate most of the oil and gas assets as joint ventures should be blamed for lack of gas infrastructure, which militates against consumption of gas in the country.
Ajumogobia disclosed this yesterday while explaining why the Federal Government suspended development of future liquefied natural gas (LNG) projects in Nigeria and the need for passage of the Petroleum Industry Bill (PIB) at the ESQ Oil and Gas summit 2012 held in Lagos.
He said that no major project has taken place in the upstream sector of the oil and gas industry since 2009. He said all the ongoing LNG projects including Brass LNG were kick-started prior to 2009. He said the passage of the PIB into law is fundamental and the non passage constitutes fundamental dysfunctional issue in the industry.
He said he presented the PIB to the Federal Executive Council (FEC) and didn’t expect that the passage would drag till today.
He said that government suspended future development of LNG projects because everybody wanted to go into it because it was very profitable without complying with government’s policy of deepening gas consumption in-country.
He said: “LNG is very profitable, one of our cash cows, everybody wants to do LNG. What government said is that we need gas locally; people are burning firewood when we have gas, which we can use to cook and so on.
“So you (IOCs) must contribute a certain amount of your gas to the domestic market and you will not promote any further export project until you do so. That is why the gas term in the PIB is very important because even if we will develop gas, what are the terms under which we will develop them. That is why the implementation of gas master plan is very important point.”
He explained that what is happening in power sector is that the infrastructure to take gas where the power plants are is not there.
He said: “Who will build it? We have a joint venture where government owns 60 per cent interest and the IOCs 40 percent. So if the IOCs bring their 40 percent, government has to bring its 60 per cent to build the pipeline. If government doesn’t bring its 60 per cent, the pipeline doesn’t get done and the gas cannot be moved. So, when you hear government say it produces more gas than the power plants can take, yes it it is true in the east but the power plants such as Papalanto, Geregu and Omotosho are in the west.