LEADERSHIP

A new gas-based Industrialisation (GBI) policy of the federal government is set to generate massive job employment, according to experts.

At least 60 million jobs are targeted to come through its implementation, according to a study by experts in the industry.

Mr. Louis Brown Ogbeifun of the African Initiative for Transparency, Accountability and Responsible Leadership, AfriTAL, while commenting on the initiative, drew attention of LEADERSHIP Sunday to a current study by the Facility for Oil Sector Transparency and Reform (FOSTER) on Co-location framework as a strategy for gas-based Industrialisation (GBI) implementation that is capable of creating 60 million jobs in the next 10 years in Nigeria.

FOSTER is an international organisation that works in partnership with national decision makers to diagnose policy problems, develop public policy, support its implementation, and evaluate its impact and by bringing together national and international expertise, it helps governments in these countries to implement impactful public policy that will bring about lasting, positive change.

LEADERSHIP Sunday learnt that the co-location concept is a practice which promotes optimisation through one or more plants sharing mature pre-existing infrastructure, rather than building their own infrastructure, or waiting for a third party to do so.

Ogbeifun explained that since this is a new concept to the oil and gas space, it is crucial for the country to understand the concept of colocation strategy for the implementation of gas-based industrialisation projects in Nigeria.

He said the buy-in into the initiative by government had become imperative as the nation today requires a radical change that would transform the oil and gas industry into a world-class energy sector.

Advocacy campaigns, he observed, have in part led to many attempts aimed at reviewing Nigeria’s oil and gas laws that would attract investors, allow the sector to run unencumbered and improve its bankability.

He recalled that 19 years after the Petroleum Industry Bill, which started its journey as the Oil And Gas Implementation Committee (OGIC) in April 2000, it is yet to be passed into law.

“In June and July 2017, the Federal Executive Council approved the National Gas Policy and the National Petroleum Policy (NPP) respectively. Laudable as these were, they are yet to be progressed to the realm of law.

“In 2018, the National Assembly also passed the PIGB into law. Unfortunately, the Bill is yet to be signed into law.

In addition, the fiscal, Host Community and the Administrative Bills are still within the confines of the National Assembly. As this administration winds down, there is nothing in the horizon to show that these bills shall see the light of day.”

Ogbeifun stated that in spite of the reputation of Nigeria as the second largest producer of liquefied petroleum gas, LPG, in Africa, progressing her per capita usage of LPG has been stalled by failures traceable to systemic corruption, lack of political will to review and implement policies, rent-seeking, entrenching the culture of promoting conflict entrepreneurs, which leads to non-bankability of oil and gas investments and projects, and painful abandonment of projects, neglectful under-development of the market and the oil producing environments.

Nigeria, he said,  is a blessed nation with abundant and enormous gas resources that is capable of generating massive employment that would ease the pressure of unemployment on our teeming youths, but sadly the country has not fully harnessed the opportunities presented by the value chain of all the products available within the oil and gas streams.

”Though the Nigerian Liquefied Natural Gas (NLNG) has done well in its quest to earn scarce foreign exchange for Nigeria and launch the country into the international markets, it has been unable to satisfy Nigeria’s domestic demand. For instance, Nigerian LPG production was estimated at 2 million metric tonnes per annum (MTPA) in 2016, but her annual per capita consumption of 2.3kg remains lower than the West African regional average of 3.5kg and the Sub-Saharan African average of 2.5kg.

“Paradoxically, Nigeria is presently exporting her crude and importing finished products for use in Nigeria. Over 90 per cent  of her domestically produced Liquefied Petroleum Gas is exported and, in return, we massively import LPG for local consumption.”

Speaking further, he added that just like the petroleum subsidy regimes became  a big profitable venture for rent seeking and highly connected Nigerians, the LPG business is also encumbered by avoidable bureaucratic distortions. He listed other pitfalls to include under-utilisation of the LPG; lack of effective planning for the use of the LPG; lack of political will and effective strategy to formulate and implement a reversal of the current export-driven LPG strategy to one of increased domestic utilisation; corrupt practices; a defective LPG penetration strategy; lack of enabling infrastructure; lack of effective regulatory mechanisms; the persistence of giving priority to Premium Motor Spirit (PMS) over gas as a value-based energy product and lack of critical and mature midstream infrastructure needed to achieve near-term gas-based implementation strategy in Nigeria.

He said that given the gap, or near absence of critical and mature midstream infrastructures, among others, to support gas-based industrialization (GBI) project in Nigeria, in trying to address some of the gaps identified above, FOSTER, conducted two studies and recommended co-location as an infrastructural optimisation strategy that could be explored.

He lauded the strategy as being capable of encouraging and promoting increased GBI investments by the private sector; creating a vibrant value chain, providing employment, substantially increasing governments revenue and having the potential to reduce host-community conflict in the Niger Delta.

“If the country must effectively implement the principles of co-location, the press has to play a major role in the dissemination of the advantages and workability to the populace. They can only play this critical role if they fully understand the concept and how it could help Nigeria achieve her optimum in gas-based implementation. This therefore, is one of the reasons you have been invited for the training and dialogue.

“On the flip side is the worrisome phenomenon of contestations, dysfunctions, skirmishes, stalling or total abandonment of developmental projects intended for the Niger Delta, which hitherto was ascribed to agitations for resource control, injustices perpetrated by authorities, unemployment and environmental degradation,” he said.

Also, speaking to LEADERSHIP Sunday on the initiative, Solomon Adeleye, a gas expert, said Nigeria needs to create 60 million jobs in the next 10 years when the unemployment figure is expected to hit 60 million people. According to him,

GBI will enable Nigeria maintain a minimum three per cent GDP growth.

“Nigeria has the 9th largest gas reserves in the world, with proven gas reserves of 188 trillion cubic feet (tcf). Little effort has been made in the exploration of non-associated gas historically. Natural gas exploration was mainly undertaken by the oil majors (Shell, Chevron, Agip, Texaco, Mobil, Elf, Ashland, and Pan Ocean) with Shell taking the lead”, he added.

Corroborating their positions, Charles Majomi, another gas expert, remarked that co-location promotes the sharing of infrastructural facilities and services.

He cited the example of Warri refinery’s existing properties which include landed property, jetty facilities infrastructure, services and 125MW of electrical power plants.

Others are water treatment plants, two nitrogen plants, compressed air systems and wastewater treatment plants.

“Opportunities abounds in the strategy. Government should sensitise the custodians of the existing hydrocarbon complexes, create a platform to explore the co-location strategy and formalise engagement and alignment  with interested stakeholders”, he said.

The proposed Co-location Roadmap, according to him, will include, but not limited to, identifying a potential location for sharing of infrastructural facilities and services; liaising  and officially communicating with the management of the potential location; establishing the current status of each infrastructure and service and completing preliminary investigation to include detailed audit and status of existing facilities, utilities and services to be shared.