The Chairman, Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, has said that the regulatory agency will consider endorsing contracts for natural-gas supply above the regulated rate between a “willing buyer and willing seller,” so as to ensure increased deliveries to the country’s ailing power plants.
Nigeria, which holds Africa’s largest gas reserves, raised
the price of gas to power plants to $2.50 for 1,000 standard cubic feet last
August from about 50 cents to help spur deliveries but gas producers have said
that they may need more than that to guarantee supplies.
Nigeria produces about 9 billion cubic feet of gas a day, of
which half is exported as liquefied natural gas, while one billion cubic feet
is flared during oil production and another 1 billion is re-injected into oil
wells to maintain pressure. Almost 2 billion goes to industries and power
plants, where demand is forecast to more than double to five billion cubic feet
a day in two years.
Amadi said any proposed gas deals from energy companies must
be “prudent.” “The bottom line is that because the tariff in the electricity
industry is regulated, the cost of gas will be regulated,” he added.
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