The Ministry of Petroleum Resources (Gas) has clarified media reports from senior official of the Dangote Group that company abandoned a proposed 1,200km subsea gas pipeline due to government policies stating that government policies were not responsible but a business decision for the company.
The Ministry disclosed this in a statement signed by the Spokesperson to the Minister of Petroleum Resources (Gas), Louis Ibah where he stated that the decision was taken long before the commencement of the President Tinubu administration.
Furthermore, he stated that the President Tinubu’s administration is committed to encouraging investors in the country’s gas value chain.
It stated, “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.”
Policies from the PIA that encourages gas investments
He further listed initiatives by President Tinubu that encourages investment in Nigeria’s gas value chain to include;
- Gas Pricing & Domestic Demand Regulations (2023),
- the Natural Gas Pipeline Tariff Regulations (2023),
- the Nigerian Gas Transportation Network Code,
- the National Nigerian Gas Masterplan, the National Gas Policy (2017) and
- the Petroleum Industry Act (PIA) 2021.
It was stated that, contrary to the view expressed by the Vice President of Oil and Gas at Dangote Group, there is no provision in the Petroleum Industry Act (PIA) or its predecessor policies and legislation that discourages private sector investment in gas infrastructure.
According to the statement, the PIA offers significant incentives for private entities to invest in the Gas Midstream and Downstream sectors just as the federal government encourages private investment in gas infrastructure development, with several projects already commissioned under President Tinubu’s administration.
Backstory
During an X Space session organized by Nairametrics last week, Mr. Devakumar Edwin, Vice President of Dangote Industries Limited, explained the reasons behind abandoning the plan to build a 1,200km subsea gas pipeline to transport gas from the sea to the shore.
- He stated that, at the time, government policy did not permit a single entity to operate across the upstream, midstream, and downstream sectors. Additionally, he highlighted that another policy, which granted the government ownership of gas pipelines nationwide regardless of who constructed them, further hindered the project’s execution.