In a development for Nigeria’s energy sector, Dr. Philip Mshelbila, the Managing Director and CEO of Nigeria LNG Limited (NLNG), has shed light on the transformative potential of the recent Executive Order on Oil and Gas Reforms, signed by President Bola Ahmed Tinubu. Speaking on the Global Business Report program on Arise Television on March 14, 2024, Dr. Mshelbila articulated the Executive Order’s role in catalyzing investments and fostering the development of Non-Associated Gas (NAG) in Nigeria. This strategic move is anticipated to enhance domestic gas utilization and secure a steady gas supply for NLNG’s expansion project, Train 7, marking a pivotal moment in Nigeria’s pursuit of energy sustainability and economic diversification.
Nigeria, endowed with approximately 38% of Africa’s gas reserves, has historically attracted a mere fraction of global oil and gas investment, a scenario Dr. Mshelbila attributes to the investment climate’s perceived risks and complexities. The Executive Order emerges as a game-changing initiative, addressing critical gaps in the existing regulatory framework and incentivizing investment in the sector. By focusing on the development of NAG — gas that exists independently of oil — the Order introduces tax credits and allowances specifically designed to lower the investment threshold for NAG projects. This innovative policy is expected to stimulate the development of untapped gas resources, thereby enhancing Nigeria’s energy security and positioning it as a leading player in the global energy market.
Dr. Mshelbila further highlighted the strategic importance of Train 7, a project that is reportedly 60% complete and represents a significant advancement in Nigeria’s LNG production capabilities. The project, characterized by safe construction practices and considerable progress, is set to bolster Nigeria’s LNG output significantly. The Executive Order plays a crucial role in ensuring the availability of gas supply for this project, thereby reinforcing Nigeria’s commitment to expanding its energy infrastructure and meeting domestic and international demand.
Moreover, Dr. Mshelbila discussed the NLNG’s pivotal decision in 2022 to allocate 100% of its LPG production to the domestic market, a move that predates the government’s directive to suspend LPG exports. This decision underscores NLNG’s dedication to supporting Nigeria’s energy needs and highlights the company’s long-standing commitment to the domestic LPG market, dating back to 2007. Despite infrastructural challenges affecting the uptake of Propane, primarily used in transportation, power generation, and industrial applications, NLNG is actively engaging with market stakeholders to facilitate the development of necessary infrastructure, demonstrating its commitment to fostering a sustainable energy ecosystem in Nigeria.
The Executive Order on Oil and Gas Reforms represents a watershed moment for Nigeria’s energy sector, signaling the government’s resolve to attract investment, streamline regulatory frameworks, and unlock the potential of the nation’s vast gas resources. Through targeted incentives and a clear focus on non-associated gas, the Order is poised to catalyze significant investments, drive domestic gas utilization, and support the expansion of Nigeria’s LNG production capabilities. As Nigeria LNG Limited continues to play a critical role in the global energy market, its efforts to build a better Nigeria through strategic initiatives and collaborations with the government and stakeholders are more relevant than ever. This development not only enhances Nigeria’s energy security but also positions it as a key player in the global transition towards a more sustainable and diversified energy future.
Source: The Sun Nigeria
