Development of Domestic Gas Supply Obligation Model for Efficient Gas Utilisation in Nigeria
In the past government preferred to sell natural gas to international users rather than keep it for local utilisation. The possible explanation to this is that more revenue is accruable from the sale of the natural gas internationally than locally, and market instabilities further limits the choice of local supply of natural gas. This reason has led to scarcity of natural gas for local consumption leading to limited industrial progress because most industries utilise natural gas. To curb the situation, a method must be developed for proper allocation of natural gas domestically such that gas availability and assurance of local market is guaranteed. In this paper, a domestic gas supply obligation model is developed. The model was developed by determining mathematical equations relating the gas reserve, gas utilised, gas flared and gas demanded of a company. The model seeks to enhance optimum gas supply for allocation to the strategic sectors of the economy. The model is useful in mopping up gas from the gas producing multinationals and indigenous companies and redistributing it to the strategic users. The model works out the quota of gas quantities that primary producers should mandatorily supply to the national reserve. The work developed a monitory system that will persuade gas producers for compliance to the domestic gas supply obligation. The paper encouraged gas flare down management by ensuring that gases are adequately distributed and utilised locally. The model ensures that government do not lose out rightly by ensuring that each company supplies that quantity of gas it is obligated to.