The Acting Managing Director, Niger Delta Power Holding Company (NDPHC), Mr. Chiedu Ugbo has said that to get the required volume of gas for thermal power stations, the Federal Government should support indigenous oil and gas firms to increase their output, The Nation reports.
While harping on the importance of supporting the indigenous firms, Ugbo said a lack of robust mechanisms for gas payment has made international oil firms (IOCs) that are major oil producers to shun local supply. According to him, some of the indigenous oil and gas firms that are in the forefront of domestic gas supply include Accugas, GigaGas, Seplat Plc, and Shoreline.
He noted that huge costs involved in developing gas fields and the associated transportation infrastructure to deliver gas molecules for power generation as well as the poor payment history of the power industry and securitisation of Gas Sales Agreement (GSA) payments, were major disincentives to domestic gas supply.
He therefore emphasized the need for a well publicized framework to be put in place for an interested investor or developer to have access to gas reserves in an existing production sharing contract (PSC), oil mining lease (OML) or oil prospecting lease (OPL) as well as the encouragement for a ‘willing seller willing buyer’ arrangement.