Participants envisage review would help expedite the execution of Gas Sale Aggregation Agreements by operators
The Gas Aggregation Company of Nigeria Limited has declared all agreements being used in Nigeria’s gas market would be reviewed, heightening fear of gas price hike at the domestic market.
The review, GACN said in a document sighted by New Telegraph, was necessary for it to be in tandem with present day market realities. The current Gas Sale Aggregation Agreements, GSAA, templates were developed about 10 years ago, and it is now vital to review the documents.
“The review has become necessary in order to attract investors to the country’s gas market,” the document read presented at a recent workshop involving 670 operators in the sector read. The review may lead to a rise in the cost of gas.
The workshop was chaired by GACN’s Chairman, who doubles as the Managing Director, Nigerian Petroleum Development Company Limited, Mansur Sambo. Participants at the event, which was also done virtually, said the review would help expedite the execution of Gas Sale Aggregation Agreements by operators, Interruptible Gas Sales Agreement, as well as gas swap transactions.
A statement from the management of GACN stated that the Master Gas Sale and Aggregation Agreements used in the domestic gas market was being reviewed to provide room for improved investments in the sector.
The gas firm explained that the updated Master GSAAs templates would help to promote gas utilisation and increase domestic gas consumption when concluded.
It said the templates would also be used for the purpose of enhancing power generation, deepening the growth of other gas-based business ventures and accelerating Nigeria’s industrialisation.
Sambo, according to the statement, explained that the review would support government’s drive to make gas a sustainable revenue source for the country.
He said: “The Minister of State for Petroleum Resources, Timpre Sylva’s declaration of 2020 as the ‘Year of Gas’ is backed up by several initiatives such as the National Gas Expansion Programme, nationwide gas penetration initiative through LNG-CNG nationwide roll-out, ongoing domestic gas price review.
“All of these are providing further positive impetus.” The Managing Director, GACN, Olalekan Ogunleye, noted that although the Master GSAAs had contributed to the growth of the domestic market, it should be reviewed periodically in accordance with the prevailing market fundamentals.
He explained that the current GSAA templates were developed about 10 years ago, adding that it was now vital to review the documents.