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NG News: Nigeria adopts new gas policy to favour domestic users
Fri Feb 8

ABUJA (AFP) - Energy-rich Nigeria has approved a new policy requiring gas producers to direct a part of their output to the domestic market, rather than exporting it, a presidential statement said Friday.

Under the new policy regime, "all oil and gas developers in the country are to allocate a specified amount of gas from their reserves and annual production to the domestic market," it said.

The policy, which takes effect immediately, stipulates that producers "must realign their gas development portfolios" to ensure that gas resources which are rich in valuable natural gas liquids (NGLs) are supplied to "strategic domestic sectors."

It also says that gas will be supplied at the lowest commercially sustainable prices to the domestic electricity producing sector that provides energy for residential and light commercial users.

Nigerian Oil Minister Odein Ajumogobia has previously spoken of a "misalignment" between the objectives of oil and gas multinational companies operating in Nigeria and the objectives of the government.

He referred to the use of gas as one area where the objectives of the two parties diverged.

The overall aim of the new policy is to ensure that all natural gas liquids in Nigeria are preferentially deployed for domestic use rather than for export.

The liquids, contained in gas reserves, are more valuable as raw materials than gas and can be used as fuel as well as for producing chemicals and gasoline.

The new policy, called the National Gas Pricing Policy and Regulations, is to ensure short and long-term gas availability at affordable prices for all domestic sectors, the statement said.

Nigeria is the ninth-largest gas producer in the world with a proven reserves of 124 trillion cubic feet representing about one third of Africa's total gas reserves.