Capitalwatchmedia
The federal government has disbursed N122 billion to six companies to enhance gas distribution and infrastructure
The federal government as well as six companies on Monday signed a contract for the disbursement of N122 billion to the business organisations in a bid to ramp up its gas penetration efforts nationwide.
The beneficiaries at the event which took place in Abuja were: Asiko Energy Holdings Limited (AEHL); FEMADEC Energy Limited; Ibile Oil and Gas Corporation (IOGC); Nsik Oil and Gas Limited; Rolling Energy Limited and Topline Limited.
The move is in line with the Petroleum Industry Act (PIA) 2021, which provided for the establishment of the Midstream and Downstream Gas Infrastructure Fund (MDGIF).
According to the law, the initiative is expected to help bridge the huge gas infrastructure deficit which has been a major hindrance towards gas distribution and utilisation in the country.
The MDGIF is generated from a pool of 0.5 per cent paid by oil marketing companies on every litre of petroleum products imported into the country as well as through fines paid by oil and gas producing firms as penalties for flaring gas.
Speaking at the event, the Minister of State Petroleum Resources (Gas) Ekperikpe Ekpo, who chairs the board, explained that the deal was first of its kind under the MDGIF since the passing of the PIA about three years ago.
“Today, the federal government through MDGIF is committing N122 billion into the hands of the six investors to help in the dissemination of gas to all sectors of the country.
Nigeria as projects which are financed partly by the project promoters will encourage private investment through risk-sharing by participating initially in selective high-risk projects in such other equity investments.
The projects to be funded will include Liquefied Natural Gas (LNG) plant, Liquefied Petroleum Gas (LPG) and propane storage as well as Compressed Natural Gas (CNG) comprising auto and retail infrastructure projects.
In his remarks, Permanent Secretary in the Ministry, Nicholas Ella, highlighted the commitment of the beneficiaries to the development and to enhance gas penetration to Nigerians.
“We want you to utilise this fund for the benefit of this country and the advancement of the downstream gas infrastructure fund, because whatever you use this fund for now, will determine to a large extent those companies that are coming forward to apply for this fund,” he noted.
Also, Chairman Senate Committee on Gas, Senator Jarigbe Jarigbe, stated that although the fund was supposed to be implemented from 2021 when it was gazetted, nothing had been done about it before now.
“But today, we’ve made progress. I want to congratulate the new board under the leadership of the minister. It’s a step forward,” Jarigbe said.
