The Nigerian effort to enhance the use of gas and reduce energy expenses for industries is now facing new hurdles as a row between NIPCO Gas Ltd. and Shell Nigeria Gas could jeopardize plans for a $100-million gas pipeline project in Ibadan.
The battle over which company owns the distribution rights for gas in the Ibadan area has left many investors worried that the conflict may affect Nigeria’s regulatory system and hamper the Federal Government’s Decade of Gas initiative.
This row is over a pipeline that stretches over a distance of 80 kilometres from Ogere to Ibadan with the aim of supplying cheaper and cleaner gas to the companies in the Oluyole Industrial Estate.
The manufacturers are concerned about the current situation because the pipeline project was supposed to save them more than half of their energy cost since there will be no need for them to rely on diesel anymore.
The reason for the conflict lies in the Gas Distribution Licence issued to both NIPCO and their partner, Nigeria Gas Marketing Limited, granting exclusive rights to run operations in that particular territory.
The problem is that NIPCO claims that Shell is conducting business in that particular territory and thereby contravening the Petroleum Industry Act.
Several attempts have been made to settle the matter through the regulatory body and the Oyo State Government, yet no progress has been made in settling the matter.
It is worth noting that millions of dollars have already been spent in preparation for the project, which explains why all concerned are watching to see how the matter is going to be settled.
