It emerged at the weekend that the Russian gas giant, Gazprom may suspend the proposed $2.5 billion investment in the Nigeria's oil and gas industry due to the continued delay in the passage of the Petroleum Industry Bill (PIB).
The Russian gas export monopoly in 2008 signed a memorandum of understanding (MoU) with the Nigerian National Petroleum Corporation (NNPC) on joint venture projects, covering petroleum, gas exploration and power.
Oil industry sources familiar with the deal hinted that the parties were yet to reach final agreement on the actual take-off date of the proposed multi dollar business, originally scheduled to come on stream in 2015, fuelling suspicion that the Russian company may have put the project on hold due to what sources described as "absence of clear rules".
Last year, the world's largest gas producer, said it would delay plans to invest billions of dollars in Nigeria until after the PIB was passed and general elections held.
Chief Executive Officer of Gazprom's Nigerian unit, Mr. Vladimir Ilyanin stated last year that any investment decision had to be after the general elections. He had assured that the company would roll out its plans on the massive Nigerian project once the polls were over and the PIB signed into law.
Oil industry sources said the continued delay in passing the bill was a major impediment as the company had insisted that the law must be in place before it could make any meaning commitment on the project. It had been planned that 90 per cent of the project would be for developing the Nigerian domestic gas production, processing and transportation.
Gazprom had stated that investing in Nigeria 's liquefied natural gas (LNG) made strategic sense as it was much closer to its main North American market than Russia .
The pipelines Gazprom had planned to build in Nigeria, sources said could eventually be used to ship gas through the Trans-Saharan Gas Pipeline, a project aimed at sending Nigerian gas through Niger and Algeria to the Mediterranean.
Nigeria's proven gas reserve is 187 trillion cubic feet(tcf), with about 600 tcf additional in undiscovered gas potential. Nigeria is currently the world's seventh largest in terms of proven gas reserves, but with the estimated undiscovered potential, could easily be within the world's top three in gas reserves. Gazprom was among the 15 oil companies selected by the Nigerian government in March last year as potential investors to help develop gas projects.