The Nigerian Content Development and Monitoring Board (NCDMB) have begun working with the Nigerian National Petroleum Corporation (NNPC), Oando Group, Sahara Energy and other key players to set up a committee that will develop a strategy that will drive the local manufacturing of gas cylinders, deepen utilization of gas and address challenges that might hinder the plans.
Speaking after a recent stakeholders meeting in Yenagoa, Bayelsa State capital, Ernest Nwapa, executive secretary (NCDMB) noted that President Goodluck Jonathan’s administration is promoting manufacturing in all sectors of the economy, particularly in the oil and gas industry because of the potentialities of creating thousands of jobs, retaining spend in-country and developing technology. He stated this while addressing players in the Liquefied Petroleum Gas (cooking gas) downstream sector of Nigeria.
Nwapa described gas cylinder manufacturing as a quick win, noting that local service companies now fabricate complex structures for the oil and gas industry and several companies were investing millions of dollars in setting up facilities and acquiring assets even before securing contracts.
“Once key persons in leadership on the government and industry side agree on the framework, it will work. Today, investors have put down their funds on assets that depend on long term contracts. Gas cylinders are tied directly to a huge market; the opportunities are there, even across the Gulf of Guinea,” the NCDMB boss said.
Nwapa confirmed that once local manufacturing of gas cylinders begins, the government would ban the importation of gas cylinders and insist that LPG producers like NLNG and Exxon Mobil deliver gas only to facilities that comply with extant policies.
He clarified that the push for local manufacturing of gas cylinder would be integrated into President Jonathan’s Gas Revolution agenda and complement government’s drive to get all Nigerians to adopt gas as the preferred fuel for cooking.
Nwapa suggested that the NCDMB could use a part of the Nigerian Content Development Fund (NCDF) to support companies that are committed to go into gas cylinder manufacturing.
He expressed hope that the federal government through the Bank of Industry, Ministry of Petroleum, Central Bank of Nigeria and the Board would work together to provide enablers for the scheme.
“Most countries that have successfully launched LPG scheme have a domestic price for the product. NNPC has one of the lowest prices for LPG, but the pace with which we sell is much slower than we thought. We need to get the Nigerian Liquefied Natural Gas (NLNG) Company and the Federal Government to develop a domestic prize for LPG. Also kerosene should no longer be subsidized,” he said.
Chris Osarumwense, managing director, NNPC Retail, pledged the corporation’s commitment to promoting local manufacture of gas cylinders, noting however, that prospective local manufacturers of cylinders must be challenged to meet key safety standards set by the Standards Organisation of Nigeria, SON and other certifying agencies.
He maintained that gas usage must also be grown reasonably before it can support local manufacturing of gas cylinders on a cost effective basis, suggesting that the price of gas and cylinders must be reduced significantly.