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katampe
Feb 6, 2007, 03:58 AM
http://www.businessdayonline.com/
February 2nd, 2007
Kupoloku lists barriers militating against gas sector


Absence of a legal and regulatory framework for gas and inconsistent pricing framework are among key barriers militating against achieving gas sector objectives.
Tunji OLAWUNI, Abuja
Group Managing Director of Nigeria National Petroleum Corporation, (NNPC) Funso Kupolokun listed the barriers at the public hearing on the Downstream Gas Bill 2006 organized by the Senate Committee on Gas.

Kupolokun in a 32-page presentation before the committee headed by Rufus Spiff listed other barriers as huge financing requirement and poorly defined institutional arrangements.

He explained that existing framework was written primarily for oil and hence insufficient legislative or regulatory provision for activities in the downstream sector such as transmission, distribution and supply of gas.

Kupolokun said "existing contractual arrangements are opaque and potentially discriminatory and not a sufficiently robust platform from which to develop the downstream sector".

According to him "no anti-trust law or competition law to prevent abuse of market power or anti-competition behaviour" adding "no level playing field in terms of fiscal reforms and absence of commercial terms for gas discovered in PSC concession areas".

On suggestions on how to remove the barriers, Kupolokun proposed a gas policy document that will address solely gas issues and articulate strategy of the Federal Government on prevailing issues.

The gas policy according to him would spell out the relationship of government to the private sector; legislative authority for gas projects; the roles and responsibilities of all participants in the gas chain and guidelines for gas pricing.

He said the gas policy document should ensure that the Federal Government's gas policies "are predictable and implemented within a framework known to all participants in the sector".

The NNPC GMD noted that while substantial capital requirements for the development of gas transmission infrastructures and upstream gas projects are beyond the capacity of the Federal Government "the expectation is that private sector investment will more rapidly stimulate the development of the sector".