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DPR releases guidelines for establishment and operations of downstream gas facilities

DPR has rolled out guidelines for the establishment and operations of downstream gas facilities.

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DPR reveals 4 major areas of focus for downstream operations of oil and gas sector, post covid-19, Engr. Sarki Auwalu, Engr. Sarki Auwalu

The Department of Petroleum Resources (DPR) has rolled out guidelines for the establishment and operations of downstream gas facilities across the country.

It states that companies seeking to establish gas-dispensing facilities would be required to obtain three approvals and licences, among others, before commencing operations.

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While making the disclosure in a public statement in Abuja, the DPR’s Director/Chief Executive, Mr. Sarki Auwalu, said the agency has commenced an investigation into the gas explosion incident that happened at Baruwa area, Ipaja, which claimed several lives and destroyed over 20 properties.

READ: FG estimates that alternative petrol, CNG would cost N97 per litre

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Auwalu disclosed that preliminary reports from DPR investigations revealed that the facility was operating without a licence and was carrying out illegal operations which resulted in the unfortunate incident. He promised that the DPR would continue to update the public on the progress of its ongoing investigation into the incident, while assuring that the agency will continue to collaborate with all stakeholders to ensure safe operations of all oil and gas facilities in Nigeria.

READ: Nigeria’s explosions timeline from 2019

On the guidelines for establishment and operations of downstream gas facilities, the Chief Executive Officer of the DPR said it stipulates the minimum requirements, procedures, and conditions to be fulfilled before the grant of approvals or licences for the construction, installation, modification, takeover, relocation, and operations of downstream gas facilities in Nigeria.

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Some of those guidelines include;

  • Guidelines for the establishment and operations of Liquefied Petroleum Gas, LPG, also known as cooking gas, refilling plants and retail outlets;
  • Guidelines for establishment of autogas refueling stations and add-on gas facility; and
  • Guidelines for the establishment of gas storage and utilization.

READ: Gas station explosion: Lagos to enforce stiffer measures on operators, blames negligence

Auwalu explained that the guidelines were developed to enhance gas penetration and utilization, enhance operational safety as well as ease of doing business in the oil and gas sector.

He said: “Companies intending to establish these facilities must satisfy all necessary requirements stipulated by DPR and obtain the underlisted applicable approvals: Site suitability approval; Approval to Construct (ATC)/Approval to Install; and Licence to Operate.

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“Necessary amenities and equipment like functional automated/manual leak tester, functional fire alarm system, and mounted gas detectors, adequate fire water storage, and sprinklers, perimeter fence with firewall amongst others must be provided in the facilities.

He emphasized that the objective of the guidelines was to ensure that the baseline standard regarding Health, Safety, and Environment, HSE, was achieved and maintained in all the facilities.

READ: DAPPMAN highlights critical role of warehousing and logistics in growth of downstream sector

What you should know

This is coming a few days after the last gas explosion at the Baruwa area of Ipaja, Lagos which claimed several lives with many properties destroyed. The Lagos state government in its investigation of the incident blamed the operators for negligence and non-adherence to safety standards in their operations.

That was one in a series of gas-related explosions that have occurred in Lagos and other parts of the country in the last few months with several reported casualties.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. Obichukwu Nwachukwu

    October 12, 2020 at 3:35 pm

    Hello. Thank you for the report. However and as a follow-up report, could you please obtain and publish ALL the documents containing ALL these new/updated DPR guidelines? Alternatively, you could consider adding any relevant website links on this subject to the proposed follow-up report. Keep up the good work.

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Energy

Petrol price to increase further, FG to add strategic reserves’ management cost

The pump price of petrol may be witnessing an increase as FG is set to add to it, strategic reserves’ financing cost.

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IPMAN, PPPRA, NNPC, Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

There could be a further increase in the retail pump price of petroleum products like petrol, kerosene and diesel.

This is due to the Federal Government’s proposal of the addition of the cost of managing the national strategic stocks of petroleum products to the retail price of the commodities.

READ: Petrol supply drops by over 23% due to decline in consumption

According to a report from Vanguard, this proposal is contained in the 2020 Petroleum Industry Bill (PIB) which is currently before the National Assembly for passage.

This means that the passage and subsequent signing into law of the PIB, will lead to further increase in the pump price of petrol. Other things being equal, as the cost of managing the national strategic fuel stocks would, from then, form an integral component of the pricing template of petroleum products and would determine the pump price of the commodities.

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READ: Local refining; A panacea for Nigeria’s reliance on imported refined products

Other current components of the pricing template, apart from the landing cost include the National Transportation Average (NTA), the Nigeria Ports Authority (NPA) charges, marketers margin and transportation costs.

In the new PIB that is before the National Assembly, the new Nigerian Midstream and Downstream Petroleum Regulatory Authority that would emerge from the scrapping of the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF), is to be saddled with the responsibility of setting up and managing the national strategic stocks of petroleum products.

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READ: #EndSARS: IPMAN warns of looming fuel scarcity across the country

The new agency would determine the amount to be charged as a levy for financing the strategic petroleum products’ reserves. Which would form part of the retail price of each of the petroleum products, and also mandate to work with security agencies in deciding areas of the country where the national strategic stocks would be maintained and distributed. The 2020 PIB partly reads;

  • The Authority shall: establish, administer and ensure the storage and distribution of the national strategic stocks of petroleum products in accordance with regulations issued by the Authority.
  • Determine and publish the amount to be charged as a levy for the financing of the national strategic stock, which shall form part of the retail price of each petroleum product, such levy to be determined as a percentage of the retail price and be deducted on a wholesale basis.
  • And designate, in consultation with the appropriate authorities and national security agencies, the strategic locations across the country where the national strategic stocks shall be distributed and maintained.”

READ: FG clamps down on filling stations, others for faulty measuring and weighing equipment

The PIB is also proposing that facilities and infrastructure which are to be specifically defined by the soon-to-be-established Nigerian Midstream and Downstream Petroleum Regulatory Authority for the storage of national strategic stocks would be exempted from the provisions of the law relating to open access.

The other functions of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in the new PIB include; regulating and monitoring technical and commercial midstream and downstream petroleum operations in Nigeria, and determining appropriate tariff methodology for processing of natural gas, transportation and transmission of natural gas, transportation of crude oil, and bulk storage of crude oil and natural gas.

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READ: DAPPMAN highlights critical role of warehousing and logistics in growth of downstream sector

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What this means:

This is going to add more financial burden to Nigerians who are already complaining of the high cost of petroleum products, which has negatively impacted on the price of goods and services.

It can be recalled that the Federal Government had some time ago proposed a new charge on petroleum products for road maintenance across the country. This was roundly condemned by Nigerians and some stakeholders before the idea was later suspended.

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Appointments

TCN MD, Sule Abdulaziz appointed Chairman of West Africa Power Pool

The acting Managing Director of TCN, Sule Abdulaziz, has been appointed the new Chairman of WAPP.

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TCN MD Abdulaziz, four other directors receive appointment letters

The acting Managing Director of Transmission Company of Nigeria (TCN), Sule Abdulaziz, has been appointed the new Chairman of the Executive Board of West African Power Pool (WAPP). Abdulaziz was nominated by the former Managing Director of Power Holding Company of Nigeria (PHCN), Joe Makoju, who is an honorary member of WAPP.

READ: NNPC signs gas development and commercialization deal with SEEPCO

This disclosure was made by TCN’s General Manager, Public Affairs, Mrs Ndidi Mbah, through a public statement in Abuja on Thursday, October 22, 2020.

In her statement, Mbah revealed that the West African Power Pool was created by Decision A/DEC.5/12/99 of the 22nd Summit of the ECOWAS Authority of Heads of State and Government, and adopted during the 29th Summit of the ECOWAS Authority of Heads of State and Government held in Niamey, Niger.

READ: Indian firm, Ramco signs partnership deal with Nigerian airline

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The appointment was made during the 46th meeting of the WAPP Executive Board which was chaired by the Secretary-General of ECOWAS, Ki Sengui, and held through video conference on October 21.

The statement from Mba partly reads, “While making the nomination, Makoju noted that Abdulaziz is an expert in engineering with vast experience in the electricity sector and therefore will perform creditably as the new WAPP Executive Board Chairman.

READ: Continental Reinsurance Plc acquires 100% ownership of its Botswana subsidiary

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“His proposal was endorsed by MDs and Director Generals and other members of the board,” she said.

According to the statement, Abdulaziz in his acceptance speech thanked the board members and the honourary members for his nomination as the Chairman of the board and assured them of his total commitment to the overall objective of the regional electricity body.

READ: A bitter family feud has continued to hamper this company’s growth

He also expressed the need to move the pool to the next level of operational efficiency and solicited the support of member utilities, especially members of the executive board in this regard.

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He urged members to ensure prompt payment of their contributions to the pool and also continue to collaborate actively with the secretariat to ensure effective and efficient coordination and implementation of all WAPP programmes.

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ENDSARS

#EndSARS: IPMAN warns of looming fuel scarcity across the country

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#EndSARS: IPMAN warns of looming fuel scarcity across the country, Update: Fuel scarcity looms as NUPENG directs Tanker drivers to withdraw services in Lagos

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned of a looming petroleum scarcity in the country, following attacks on fuel tankers and the disruption of depot operations across the country by hoodlums who had hijacked the #EndSARS protests.

READ: #EndSARS: Access Bank announces N50 billion interest-free facility for businesses

This disclosure was made by the Chairman of IPMAN in Rivers State, Dr. Joseph Obele, while speaking on a live radio program in Port Harcourt on Friday, October 23, 2020.

Obele disclosed that about 10 petroleum tankers belonging to its members were attacked and destroyed across the country by these hoodlums during the protests, although he noted that there had been no fatalities.

READ: DPR cautions IPMAN against PMS diversion  

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He said the scarcity of petroleum products could be inevitable if the situation failed to improve before filling stations exhausted their stocks.

Obele said, “About 10 of our trucks have been attacked nationwide by protesting youths, although there have not been casualties.

READ: #EndSARS: Feminist Coalition raise Cryptos worth $126,000

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“Supply and distribution of petroleum products haven’t really been smooth, reason arising from the fact that 90% of our supply came from Lagos and there has been a skeletal supply schedule in Lagos for the past one week.

“Thursday’s case was worse, [as] all the depots in Nigeria were shut down. We don’t produce these products; we buy from depots and tank farms, and if these depots do not give us products, we fear that when we run out of stock, petroleum scarcity will happen.”

READ: #EndSARS: Coca-Cola donates N20 million to cover medical bills of victims

Backstory

Recall that the #EndSARS protest against police brutality and extra-judicial killings, which started peacefully about 2 weeks ago, was taken over by hoodlums who meted out violence with the looting and destruction of public and private properties across the country. This has also led to the loss of lives and disruption to socio-economic activities.

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