…….PETROAN calls for review to accommodate group guarantees
Energy experts have said that existing gas infrastructure investments like the AKK pipeline project, as well as the provisions in the Petroleum Industry Act (PIA) and other initiatives, would stand better chances if oil sector players and investors take advantage of the recent N250billion National Gas Expansion Programme (NGEP) of the Central Bank of Nigeria (CBN).
They posit that Nigeria will finally bye to liquefied petroleum gas (LPG) importation into the country, if critical players in the sector strike it well with the CBN intervention fund.
The CBN intervention fund in collaboration with the ministry of petroleum resources has the capacity to unlock Nigeria’s 206 trillion standard cubic feet of gas reserves the experts say.
Despite having over 206 trillion standard cubic feet of natural gas, Nigeria imports more than half of its total consumption, a development that has now been more challenged by the war between Ukraine and Russia.
This has resulted in soaring prices and disruption to gas market globally with its attendant negative impact on the country.
According to PricewaterhouseCoopers’s associate director, energy, utilities, and resources, Mr. Habeeb Jaiyeola,o him, the CBN fund remained a critical elixir towards Nigeria’s route to economic recovery.
Jaiyeola urged industry players to take advantage of the CBN facility to address the bottlenecks in the domestic gas market, while urging sustainable finance into the gas sector.
“The move by the CBN is laudable and the intent of the fund is also quite comprehensive and seeks to ease funding challenges for all players within the LPG value chain,” Jaiyeola said.
Commenting on the CBN fund, the national president, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr. Billy Gillis-Harry said the presence of the N250billion intervention fund is enough fillip for domestic investors in the gas sector in Nigeria.
He however said there was need for the CBN to work closely with associations and groups on behalf of individual players in the domestic gas value chains. “If the groups and organisations can provide necessary guarantees for its members, then CBN’s intervention fund should be able to accommodate them – especially the players in the SME segment,” Billy said.
He stressed that the country has everything it takes to stop importation of LPG. “Nigeria has huge gas resources and should not be importing gas. I think the intervention by the CBN is commendable but more is needed. The infrastructure needed to unlock gas is huge,” Gillis-Harry said.
Programme manager, National LPG Expansion Implementation Plan, Dayo Adeshina said the intervention was critical for the sector, noting that there was need to tweak the plan to ensure that players in the sector seamlessly access the loan.
He noted that the objectives of the intervention would be achieved if commercial banks stop treating the loan as commercial loans.
It would be recalled that while providing insights at the onset of the CBN intervention fund in August 2021, the technical adviser, gas, to the minister of state petroleum resources, Mrs. Brenda Ataga, disclosed that applicants would be evaluated in seven fundamental areas which they need to show evidence.
“The seven areas we will be assessing each application on are, One; the technical feasibility of the applicant’s plan; Two, the overall business plan; Three, the skills and experience output of the business plan; Four, the socio-economic impact of the business plan; Five, the financial feasibility of the plan; The finance and economic model; and finally, The environmental sustainability of plan, she said.
She explained that “environmental preservation is a key aspect of our switch to gas as a country.”
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