Production of natural gas experienced a decline last year, despite the injection of a N250 billion intervention fund into fifteen companies, as revealed by findings from InfoStride News. The Energy Institute, in collaboration with KPMG, reported a decrease of 4 billion cubic meters in Nigeria’s natural gas production from 2021 to 2022.
In 2012, the country’s gas production stood at 39 billion cubic meters, steadily increasing to 49 billion cubic meters by 2020. However, there was a sudden drop to 45 billion cubic meters in 2021, followed by a further decline to 40 billion cubic meters in the subsequent year.
The decline occurred despite the Federal Government’s allocation of a N250 billion intervention fund through the Central Bank of Nigeria. Out of this fund, N130 billion was disbursed to 15 companies for the construction of Compressed Natural Gas (CNG) conversion centers.
The National Gas Expansion Program (NGEP), initiated by the Federal Government, aimed to make CNG the preferred fuel for transportation and Liquefied Petroleum Gas (LPG) the preferred fuel for domestic cooking, captive power, and small industrial complexes.
Following the NGEP launch, the Central Bank introduced the N250 billion intervention facility to stimulate investment in the gas value chain, aligning with efforts to boost finance in critical sectors of the economy.
The fifteen companies that received a combined N130 billion include Dangote Oil Refinery, Nipco Gas Ltd, Nipco Plc, Hyde Energy Ltd, Lee Engineering and Construction Company, Pinnacle Oil and Gas FZE, Transit Gas Ltd, Amalgamated Oil Company Nig Ltd, First Modular Gas Systems Ltd, NOVAGAS Ltd, Greenville Liquefied Natural Gas Company, AP LPG Limited, MOB Integrated Services Limited, Delta State Government, and Gas Nexus Ltd. These companies are set to face the Senate Committee on gas, chaired by Jarigbe Agom Jarigbe, to provide progress reports, project locations, and current project statuses on Thursday.
The Senate’s summon letter, as reported by InfoStride News, stated, “The invited companies are required to appear with their progress reports, stating location or projects and the current status of the projects.”
Chinedu Okoronkwo, President of the Independent Petroleum Marketers Association of Nigeria, expressed dissatisfaction with the exclusion of his members from the loan. He claimed that if his members had received funding, they could have converted over a million vehicles to CNG models by now.
In August, the Nigeria Extractive Industries Transparency Initiative revealed that Nigeria needed $20 billion annually to realize the desired gas expansion plan and address the country’s gas infrastructure challenges.
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