Friday, June 20, 2008

FG approves Nipco to operate natural gas filling stations

The Federal Government has granted approval to Nipco Plc to operate natural gas filling stations as fuel for cars in Nigeria. The innovation by the company has finally boost the  campaign by the Nigerian National Petroleum Corporation (NNPC) that private investors should invest in downstream gas utilisation projects especially the construction of natural gas filling stations which has failed to attract investment by major marketers.
Mr. Girish Sanadhya managing director, Nipco Plc confirmed that the approval granted by the government to improve the utilisation of compressed natural gas (CNG) will assist the company to embark on the construction of natural gas filling stations in Benin, Edo State during the pilot scheme. The project, according to him is expected to commence at the sites acquired by the company on completion of feasibility studies and approval of capital required to finance the construction. “As part of our contribution to the nation’s economy, we have decided to launch the project so that the dependence on fuel importation will become a thing of the past and annual expenditure of fuel subsidy would be used to finance viable development projects in the country by the government to make Nigeria one of the leading 20 economies by 2020 in line with Vision 2020 goals,” he said.
Sanadhya noted that the company is expected to spend   N7.02 billion on all its downstream gas projects being executed in the country. In this case, he disclosed that $50 million (about N5.85 billion ) out of the budget would be committed to implementation of its liquefied petroleum gas (LPG) project and  N120 million on the  natural gas filling stations. “On completion of the pilot scheme in Benin, we have carried out studies that would enable us to introduce the use of natural gas as fuel for cars in Port Harcourt, Ibadan, Kano and  Abuja before coming to Lagos”, he noted.
According to Sanadhya “the success of natural gas as fuel for city bus in Delhi India could be replicated in Nigeria if necessary support is provided in line with the commitment of the Federal Government to earn the same level of income from natural gas as in crude oil by 2010. “It is possible that the initial cost of conversion of a car engine to dual fuel consumption system may be high as N120,000,. but the spread of the cost over a given period of the life of the car engine shows that it is better to  utilise natural gas as fuel instead of premium motor spirit (PMS) and diesel”.
He added that filling stations of independent marketers have also been identified as distribution points of LPG so as to improve its utilisation in rural areas. He noted that four workshops are expected for completion so as to assist in reducing cost of conversion and carry out maintenance of dual engines to use natural gas.
The introduction of gas filling stations in Nigeria implies that environmental pollution from burning of liquid fuel will reduce and it will assist the federal government to comply with the Kyoto treaty aimed at reducing global warming. Besides, the introduction of natural gas as fuel for cars will improve the fortunes of independent marketers operating in the country as drivers of the project and also encourage investment in gas gathering projects by multinational oil producing firms so as to bring an end to flaring on their oil fields. 

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