The Federal Government has said that it did not discourage the 1,200km of subsea gas pipeline that the Dangote Group said it wanted to build.
The Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, made this clarification in a statement issued on Tuesday by his media aide, Louis Ibah.
The statement was titled: “Re: Government policies made us abandon plans to build 1,200km of subsea gas pipeline – VP Oil and Gas, Dangote Group.”
The Vice President, Dangote Industries Limited, (DIL) ,Mr Devakumur Edwin, had said government policies made DIL to jettison its plan to build a 1200km subsea gas pipeline to bring gas from the sea to the shore.
He added that the company had planned to process the gas for use by local companies and businesses.
He spoke during a recent space on X organised by Nairametrics.
Edwin said: “Nigeria has a lot of gas which is trapped in the sea because there is no way to bring it to the shore.
“We wanted to invest in a network of 1,200km of subsea gas pipeline to bring the gas to the shore and our idea was not to export as NLNG because there is absolutely no difference between exporting the crude or the gas because it is raw material which you can produce a range of petrochemical materials from.”
“The gas pipeline was supposed to bring in 2 billion scf of gas. We did a one-year study by hiring two ships to identify the route through which we lay the subsea gas pipeline so that the gas can be collected and evacuated.
“But then, the government’s policy was that there can be one player upstream, midstream and downstream. We were trying to find a solution to that.
“Then the government said all gas pipelines, once you build it, you’ll hand it over to the Nigeria Gas company. So this is how the project was abandoned.”
In response, Ekpo said that contrary to the view expressed by Edwin, there is no provision in the Petroleum Industry Act (PIA), or its predecessor policies and/or legislation, that discourages private sector investment in gas infrastructure.
He stated that the PIA offers significant incentives for private entities to invest in the Gas Midstream and Downstream sectors, adding that the Federal Government encourages private investment in gas infrastructure development.
He also said that the decision to build or abandon the project was solely a business decision of the Dangote Group, taken long before the inauguration of the President Bola Ahmed Tinubu-led administration.
The statement read: “The attention of the Honourable Minister of State Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, has been drawn to the recent statement attributed to the VP Oil and Gas of Dangote Group, regarding the abandonment of plans to build a 1,200km subsea gas pipeline due to government policies, during a webinar hosted by Nairametrics.
“Hon. Ekpo notes that the decision to build or abandon the project was solely a business decision of the Dangote Group, taken long before the inauguration of the President Bola Ahmed Tinubu-led administration.
“The Federal Government, under President Tinubu, is committed to creating an environment that encourages investors who are willing to invest in projects in the Gas Value chain .
“As a matter of fact, the Federal Government has taken deliberate steps over the years to encourage and stimulate investment in the Gas Sector by approving various policies, such as the Gas Pricing & Domestic Demand Regulations (2023), the Natural Gas Pipeline Tariff Regulations (2023), the Nigerian Gas Transportation Network Code, the National Nigerian Gas Master Plan, the National Gas Policy (2017) and the Petroleum Industry Act (PIA) 2021.”
He added: “These policies and laws provide a conducive environment for private sector investment in domestic gas development.
“The PIA established the Midstream and Downstream Gas Infrastructure Fund (MDGIF) to support more private sector investment in gas infrastructure development.
“Contrary to the view expressed by the VP Oil and Gas of Dangote Group, there is no provision in the PIA, or its predecessor policies and/or legislation, that discourages private sector investment in gas infrastructure.
“The PIA offers significant incentives for private entities to invest in the Gas Midstream and Downstream sectors. The Federal Government encourages private investment in gas infrastructure development, and several projects have been commissioned under President Tinubu’s administration.
“Notable examples of the positive impact of the FGN’s concerted effort to stimulate private sector investment in the Gas value chain, include resolution of gas supply issues to major projects like the Geometric Power Aba Limited Power Plant and the Brass Fertilizer and Petrochemical Company Limited demonstrates its support for local investors, with groundbreaking novel approaches to resolving issues.
“The Hon. Minister of State Petroleum Resources (Gas) wishes to reiterate that any private entity interested in investing in the Gas Midstream and Downstream sectors is free to do so, with government incentives available to encourage investments that contribute to national economic growth and development.”
