New gas policy adopts tolling arrangement for future LNG projects, others

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The federal government has adopted a new approach in its investment in new joint venture Liquefied Natural Gas (LNG) projects in the country, wherein, it would retain ownership of its shares of the volume of natural gas produced up till the point of delivery in the international market, THISDAY reports.

This is contained in the newly approved National Gas Policy. The tolling arrangement would serve the government in the exports of its equity LNG from new projects that would be coming on board. Under this new plan, the LNG liquefaction facility would be paid a fee for liquefying the government share of gas produced from its assets, as well as the LNG shippers who would be paid a transportation fee for transporting the LNG to their destinations. This is pretty different from what exists in its joint venture arrangement in the country’s only LNG company – the Nigeria LNG (NLNG).

Also, the government plans to spend N60 billion over a five-year period to provide up to 20 million cylinders to escalate the adoption of liquefied petroleum gas (LPG) as a primary cooking fuel in Nigerian homes. The government also explained in the document that gas as a resource would be treated as a standalone industry separate from oil and that it would accord greater priority to using gas to develop Nigeria’s domestic economy, adding that the country’s transport; power; industrial; and agriculture sectors would get improved attention in using gas to drive their operations.