Total, NNPC sign agreement to deliver gas without pipelines

Minister of State for Petroleum, Dr Ibe Kachikwu
Minister of State for Petroleum, Dr Ibe Kachikwu

The Nigerian National Petroleum Corporation (NNPC) on Tuesday signed a Joint Venture agreement with the Greenville Oil and Gas Co. Limited for the production and distribution of Liquified Natural Gas (LNG) from Rumuji, Rivers state without pipelines to other parts of Nigeria, especially in the north.

It is the pioneer Nigerian LNG that will distribute gas using special trucks for domestic consumption, by creating a virtual gas pipeline to supply natural gas to those regions not served or underserved by physical pipelines.

The project which stretches for about 1,000km is said to have the capacity of creating numerous jobs for truck drivers, attendants and others.

Speaking at the ceremony in Abuja, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, noted that the negotiation of the agreement had been on in the past three years.

He said the agreement would, in the first instance, produce 250 Standard Cubic Feet per can increase to 500SCUF per day in the long run.

According to him, the “agreement will help us unlock undeliverable opportunities in terms of supply to power and supply entities. It will help some of the oil companies to meet up with their Direct Supply Obligations that they had earlier signed that they have been unable to execute.”

“We need to find our ways that in the absence of sufficient trucking to put pipelines in place very rapidly we needed to look for new technology.  And we had been having this conversation over the last two three years. We started first by looking at the structure in which the gas and power of NNPC was working and we set up two companies -the NGLC which is the marketing company itself and of course the NGPTC, which is supposed to deal with the infrastructural provision,” he added. 

The minister predicated the success that led to the signing of the agreement on the calmness in the Niger Delta, which will enable the company access the gas.

He said that the pioneer gas trucked project is coming as a challenge and opportunity to other investors that have been looking for a way to access and distribute gas in the absence of pipelines.

“This doesn’t take away the need for pipelines. We are going to continue providing pipelines. But what is there is that we no longer can wait. We can actually move in a very robust manner and to get gas up in the north,” he said. 

Kachikwu noted that what is still needed to be done is ensure that the payments issues are dealt with and the financing is being smooth for both the producer of the gas and the individuals who take responsibility to distribute it are both adequately paid.

“I think we will be working with you as federal government agencies once we begin to deploy to places like NNPC, the Central Bank, the Senate to ensure that payment under the new system is made on time. So that there is a good financing and funding for you to do the future expansion project.

“The first one is 220 per day but it has the capacity to go up to 5,000 per day. So it is quite massive. So what you find is that over the next three to four years if the right finances are put in place and adequate patronage and market are created this could actual metamorphose into the avenue for deploying gas in the country,” he added. 

He urged other investors to emulate the model especially at the centre where people can afford to pay the right kind of pricing for the supply of power.