The new Petroleum Industry Bill, 2020, currently before the National Assembly, is proposing the establishment of a specialized intervention mechanism, called the Midstream Gas Infrastructure Fund, to deepen gas usage in the country.
According to the bill, the purpose of the Fund shall be to make equity investments of government-owned participating or shareholder interests in infrastructure related to midstream gas operations.
This, the bill said, is aimed at increasing the domestic consumption of natural gas in Nigeria in projects which are financed in part by private investment; and also encouraging private investment in the midstream gas sector.
The bill is proposing that, on its passage, the Midstream Gas Infrastructure Fund would have the power to acquire, hold and dispose of property, sue and be sued in its corporate name, while it shall have a Governing Council which shall supervise and make investment decisions for it.
It said the Minister of Petroleum Resources shall be the Chairman of the Governing Council; which would also have a representative of the Central Bank of Nigeria not below the rank of a Director; a representative of the Ministry of Finance, not below the rank of a Director; and the Chief Executive Officer of the soon-to-be-created Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The Governing Council of the Fund would also have an Executive Director, Midstream Gas Infrastructure Fund; two independent members, who shall be appointed by the Minister of Finance for a period of four years and may be reappointed for another four years and no more; and the Legal Adviser of the Authority who shall serve as the Secretary to the Governing Council.
The Bill said: “The Executive Director, Midstream Gas Infrastructure Fund shall – have extensive managerial, technical or professional knowledge of the midstream petroleum operations and or fund management or any other relevant industry with a minimum of 15 years’ post-qualification experience; and be responsible for project management and the day-to-day running of the affairs of the Midstream Gas Infrastructure Fund.”
The bill is proposing that the Midstream Gas Infrastructure Fund be funded through a not more than one per cent of the levy prescribed in a regulation under the Act, derived from wholesale price of petroleum products sold in Nigeria and natural gas produced and sold, which shall be collected on wholesale basis.
It is also stipulating that, “It be financed through funds and grants accruing from multilateral agencies, bilateral institutions and related sources dedicated partly or wholly for the development of infrastructure for midstream gas operations in Nigeria.
“Interest, if any, payable in respect of money in the Midstream Gas Infrastructure Fund; and any other sum, freely donated or accruing to the Midstream Gas Infrastructure Fund for development of infrastructure in midstream gas operations.”