Experts Warn Delay in Gas Pricing Will Stifle Growth

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced a postponement of the transition to a market-based gas pricing regime, which may extend up to two years. Chief Executive Mr. Rabiu Umar acknowledged producers' frustrations but stated that the industry has not reached the necessary maturity for this transition.

Experts, including Mr. Chikezie Nwosu, Group Chief Executive Officer of HSI Energies Limited, warned that delaying this transition could hinder the development of Non-associated Gas (NAG) fields, essential for Nigeria's energy and industrial future. Nwosu emphasized that while associated gas will continue to flow with oil production, it cannot be relied upon as oil production declines.

He noted that gas buyers require long-term contracts, typically spanning 15 to 20 years, which cannot be efficiently met by associated gas alone. Additionally, Mr. Toyin Akinosho, a geologist and Publisher of Africa Oil+Gas Magazine, pointed out the conflict between gas producers, who favor a quick transition, and power companies, which oppose it.