FG cuts price of Gas-To-Power from $2.50/mmbtu to $2.18/mmbtu


The Federal Government, on Thursday, reviewed downward the price of gas-to-power from $2.50/mmbtu to $2.18/mmbtu for domestic supply obligation (DSO).

In his remarks at the 2021 Gas Sector Stakeholders’ Forum themed: Optimizing the Economic Development Capacity of the Ajaokuta-Kaduna-Kano “AKK” Gas Pipeline Project, in Kano, Minister of State Petroleum Resources, Chief Timipre Sylva, said the decision for the downward review followed a robust negotiation between the federal government, Labour and other stakeholders.

“Let me use this medium to announce to this gathering that following the successful negotiation between the FGN and the Organized Labour Unions, and the detailed review of the gas pricing framework in Nigeria, the price of gas-to-power has been reduced from $2.50/mmbtu to $2.18/mmbtu(domestic supply obligation – DSO) with immediate effect. The outcome of the negotiations and review have been communicated to the relevant stakeholders”.

Sylva said the completion of the AKK gas project will further enhance government’s drive towards expansion of domestic gas penetration in the country.

According to Sylva “Our successful collaboration and the completion of the AKK in 2023 will significantly enhance Mr. President’s vision and current drive for increased domestic gas utilization as the mainstay for national industrialization, increased foreign investment, government revenue growth and ultimately provide more job opportunities for Nigerians”.

The minister added that the “National Gas Expansion Programme, which was launched in January 2020 is the flagship programme that is focused on ensuring that all these objectives are achieved and that the gains emanating therefrom are sustained”.

He noted that the “Forum is yet another demonstration of the Federal Government’s total commitment to the realization of the objectives underpinning the “Decade of Gas”declaration”.

Sylva recalled that a similar engagement in Owerri, Imo State in 2020 “brought much awakening to the region, leading to increased collaboration between the private sector, respective state governments and relevant agencies for gas commercialization towards meeting identified energy demands in the area”.

He said today’s event “focused at facilitating increased gas penetration in the northern part of this great country, especially the AKK pipeline corridor of FCT, Kano, Kaduna, Kogi, Niger, Nasarawa and other neighbouring states. Therefore, this Gas Sector Opportunities’ Forum is geared towards sensitizing the entire northern part of Nigeria of the upcoming opportunities to bring both new and hitherto moribund companies to life”.

While welcoming participants to the Gas Sector Stakeholders’ Forum on behalf of President Muhammadu Buhari, the minister emphasized “reinforces our commitment to realising the inherent potentials of gas usage as a national catalyst for achieving economic diversification from crude oil and as transition fuel from fossil of today to the renewable energy of tomorrow. It is this commitment that informed our support and eventual commissioning of two (2) gas-powered plants (virtual pipeline operated) in Kano City in December 2020, achieving the uninterrupted delivery of over 30 Mega Watts power supply to the industrial hubs”.

Speaking on the economic potential of the AKK project, Group Managing Director (GMD) Nigeria National Petroleum Corporation (NNPC) said the AKK project when completed will ceate prosperity in the country recalling that the project was been in the pipeline in the last 30 years and added that the decision to complete the project was borne out of the desire of the government to deepen gas penetration in the country.

When completed Kyari said the AKK will free about eight million scf of gas, deliver about two million scf of gas adding that delivering the project would be a massive achievement of government.

Emphasizing the significance of the project the NNPC boss said as soon as the project is delivered it will help breathe life into about 200 companies, massively create job and make the entire corridor of the AKK project become haven of business activities and thus appealled to stakeholders to work collectively for three timely completion of the project.

He assured of the speedy completion of the project stressing that AKK won’t be an abandoned one as the government is determined to complete the project in record time, provide robust business opportunities, guarantee investments in the country as well as provide about 150 kilowatts of power in Kano to power its industrial base.

In his welcome address, Managing Director of Nigeria Petroleum Development Company (NPDC), Engr. Mansur Sambo, who doubles as Chairman of the Gas Aggregator of Nigeria, said “we are here to sensitive users in Kano ahead of the completion of the AKK gas project. The AKK project is met to rekindle the vibrancy and economic activities in Kano and in the entire northern Nigeria”.

He added that the dream of the Ministry of Petroleum Resources is to bring back the past industrial glory of the ancient city of Kano adding that the AKK project will help spring up gas utilization in Northern Nigeria and Kano in particular.

He added “we will not wait until the gas pipeline is completed” stressing that the stakeholders forum “is designed to lay the foundation for ultimate utilisation of gas in the geo-political region”.

Present at the event was the Governor of Kano State Dr Abdullahi Ganduje while the Governors of Niger State, Alhaji Sani Bello, Governor Nasarawa State Engr Abdullahi Sule, Deputy Governor of Kaduna state and Minister of finance Zaiab Ahmed made virtual presentations at the event.

Emir of Kano, His Royal Highness, Aminu Ado-Bayero, top management of the NNPC and others stakeholders in the oil and gas were also present at the event.


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