Dom market holds incentive for gas investments ___Asiko Energy
Sopuruchi Onwuka
Numerous policies and laws in the Nigerian petroleum industry have generated the required demand incentives for investments in production of various gas products for homes and businesses in the domestic market.
General Manager in charge of Operations at Asiko Energy Holdings Limited, Busayo Fabunmi, stated at the 2023 Annual International Strategic Conference of the Association of Energy Correspondents of Nigeria (NAEC) that policies, laws and subsequent regulations in the domestic energy industry have achieved significant demand shift to gas as the world begins gradual movement towards energy transition.
He said several policies and laws including the Petroleum Industry Act (PIA) provided the framework for proper oversight for supply to strategic sectors of the economy and propel businesses with available gas differing specifications of gas products to bring their cost down, and improve their overall margins.
Busayo Fabunmi who spoke on “Energy Transition, PIA, Petroleum Pricing and the Way Forward for the Downstream” held that petroleum products in the market should be broadened to provide consumers price options.
Whereas consumers should be allowed to choose the form of energy to run with, he argued, the investors should also be offered the opportunity to track demand as the prime indicator of commercial viability.
“That would be a better situation to have, because some investors may be attracted to look at those fluctuations and challenges as opportunities for them to invest. They would come in and analyse the sector and industry and could pick where they want to invest. This is the way to go as far as pricing of petroleum products is concerned,” he said.
Fabunmi pointed at the rising demand of new gas products as great opportunity for Asiko Energy which, according to him, is building production, holding and distribution capacity for new fuel options emerging from the natural gas.
He said compressed natural gas (CNG) has caused “a seismic change in the way we consume energy on our roads, in our houses, and even at the sea.”
He stated Asiko Energy Limited had to switch its fuel for its distribution fleet to CNG in a desperate move to escape the high cost of diesel, improve efficiency and enhance overall commercial efficiency of its operations.
“At a point, it was becoming practically impossible for us to continue with the distribution of business running on diesel. So we needed to explore alternative fuels. We ran the exercise and we saw a significant reduction in terms of cost. Now, we are on the verge of making additional investments in this regard,” he testified.
He also disclosed that the company is coming into the LNG space.
“We have been in the CNG space for about two decades but just last year Asiko Energy ventured into LNG space. We have made some investments in addition to the LPG terminal we are building right now in Lagos. The phase II of the project will be LNG. The whole idea is to deepen the gas adoption and penetration,” he pointed out.
According to him, the company is focusing on the gas policy of 2017 which emphasis increasing the use of gas domestically, in areas of agriculture, transportation, and Power.
“Our focus is not just to sell gas but also to help industrial consumers lower cost. In the past five years, we have seen a 25 percent growth in gas consumption year on year, except for last year when there was 13 percent dip. What this tells us is that the market is there.”
The rising demand for different gas products following policy and programmes of government on autogas policy, gas expansion programmes and LPG penetration has created the required demand incentive for investments in meeting local consumption, Fabunmi declared.
