Chika Amanze-Nwachuku
16 November 2009
Lagos — Gaslink Nigeria Limited, a subsidiary of Oando Plc, has commenced reconnection of gas to its customers whose indebtedness is within the range of N2million. It also emerged at the weekend that the Minister of Petroleum Resources has waded into the face-off between the company and manufacturers over discontinuation of supply to some industries, particularly those in Lagos State.
Manufacturers Association of Nigeria (MAN) had raised an alarm over the upward review of gas price and discontinuation of supply to some industries by Gaslink, a major gas supplier to industries in Lagos.
Throwing more light on the issue at a media briefing weekend,Executive Director, Corporate Development, Oando Gas Power(OGP), Mr. Olanrewaju Falade, said only customers who violated the terms of agreement contained in the Gas Sales On Purchase Agreement (GSPA) were disconnected from the company's gas grid."Gaslink disconnected only defaulting customers from our gas grid.
"Please note that this is an ongoing exercise, which is in line with the contract governing our relationship with our customers. Such affected customers become eligible for disconnection after the contractual 30 days credit period, and a subsequent 30 days of grace.
"According to the Gas Sales and Purchase Agreement (GSP)with our customers, the price of gas is a fraction of the end user price of the least cost alternative, which is Low Pour Fuel Oil (LPFO), as it is the practice in international markets.
"In consonance with this contract, we have adjusted the price of gas in line with the published price of LPFO by the relevant government agency empowered to do so. It is also important to note that when international LPFO rates are low, the gas price is also reflective.
"As a result of our gas supply, industries have been able to reduce their fuel costs on the average by as much as 50 per cent and return billions of naira in profitability.
It is, therefore, unfair that these same industries complain about paying appropriately for the very resource that drives their increased profitability," he said.
Falade said Gaslink is a responsible corporate citizen showin gunparalleled commitment to the industrialisation of Nigeria, pointing out that to date, the company has invested over N36 billion to provide the much required gas infrastructure to aid the manufacturing industry.
"Appropriately pricing gas will sustain the development of gasinfrastructure in our country, enabling other companies to benefit from gas, thereby reducing their production costs as well.
"The lack of gas infrastructure has plagued our country for decades and has not given us the competitiveness that we require as a nation." We have constructed 100 km of gas network in Lagos, creating a loop around Greater Lagos that has made it possible for industry to run their operations on gas, which remains the cheapest energy fuel available.The claim of disconnection of 150 industrial customers is sensational. To date, Gaslink has less than 100 industrial customers connected to its gas grid, many of whom are paying their bills as, and when due. The contract is clear and unambiguous and so, we therefore, urge the defaulting customers to respect and abide by the sanctity of thiscontract as agreed to by all parties," he said.
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