Governor Sanwo-Olu of Lagos State
…Energy Sector should be well positioned to take advantage of investment opportunities in EV.
…Lagos State Government is committed to ensuring energy security and deepening utilization of cleaner fuels.
…State Government is boosting domestic utilization of natural gas to foster investment in the gas sector
-By Felix Douglas
Governor of Lagos State, Mr. Babjide Sanwo-Olu, commended organisers of Oil Trading and Logistics (OTL) Africa Downstream on its 15th annual Oil Trading & Logistics Expo and acknowledges its dedication and immense contribution to the promotion and development of the downstream energy value chain in Nigeria.
Delivering the goodwill message, Lagos State Commissioner for Energy and Mineral Resources, Engineer Lere Odusote, who represented the Governor said, the Theme of this year’s EXPO – Downstream in Transition: Getting Set, is timely, in view of the evolving global climate action agenda. The increasing pressures for decarbonization is reshaping the future of many industries – and the oil and gas downstream sector is no exception.
Sanwo-Olu made it known that energy transition towards a more sustainable and lower carbon footprint will have a significant impact on the downstream sector, thus, there is an urgent need to reposition the sector in the global transition map, to not only survive the low carbon energy transition – but to support and lead it. Sector players need to understand their role in the energy transition and move quickly to rethink strategy and take action towards reinventing and repositioning to take advantage of the inherent opportunities, diversification, optimization and new market opportunities.
Based on recent sector updates, a number of innovative players in the sector are already taking the lead in the transition. However, sector-wide collaboration is key to ensuring long term sustainability of the sector, hence the strategic importance of OTL EXPO.
The Governor highlighted three key considerations bothering the energy sector.
Disruptions in the Transportation sector
According to Sanwo-Olu, the accelerating pace of Natural Gas Vehicles provides an opportunity for significant gas infrastructure investment.
On the advent of Electric Vehicles (EV), the Governor said this might currently seem like a slow moving threat, it may have more near term business implications and the sector needs to be well positioned to take advantage of investment opportunities such as EV charging value pool (EV charging infrastructure and complimentary on-site service offerings) which McKinsey estimates has the potential to grow $20 billion by 2030.
“This puts African oil and gas retailers in a strong position to take the lead by treating it as an incremental business and capitalizing on their existing locations and facilities to deliver it, they could generate a high return on investment.”
Safety
The Governor stated further that the downstream oil and gas sector in Nigeria is currently plagued with incessant disasters ranging from pipeline ruptures (vandalism and lack of adequate maintenance inspection) to irresponsible petroleum tanker operations.
He mentioned other issues in downstream operations which include reckless and inept tanker drivers, poor maintenance, truck integrity amongst others causing oil spillages, fires and explosions with consequent socio economic loss to the country and its residents ranging from third degree injuries and burns to loss of lives and properties as well as environmental degradation.
He advised that strategies targeted at promoting safe operations and global best practices in the sector is key to ensuring its sustainability.
Digitisation
Leveraging digitalisation and data-driven decision making is imperative to helping the sector minimise its carbon footprint, increase productivity and decrease costs, as well as support new business models.
The Governor revealed that the State Government is fully committed to ensuring energy security and deepening the utilization of cleaner fuels in Lagos to ensure a safe and sustainable environment for its residents.
The State Government, through its implementing ministry and agency is on target to accelerate the transition of Lagos to a 21st century, low carbon, and economy – an integral part of the Babajide Olusola Sanwoolu (BOS) administration’s THEMES Agenda.
Some of the current initiatives of the State government in the sector includes: Lagos State Gas Policy, it recognizes the need for an enabling environment supported by a clear and unambiguous statement of intention by the government to boost domestic utilization of natural gas in the State and foster investment in the gas sector. In line with this, Lagos State, through its Ministry of Energy and Mineral Resources, is in the process of outlining its gas policy, an appropriate institutional, legal, regulatory and commercial framework for the gas sector, as well as other strategies to boost domestic utilisation in the State, remove barriers affecting investment and enhance development of the sector.
Lagos State Oil & Gas Safety Initiative
The State Government, through its relevant MDAs (Ministry of Energy & Mineral Resources, Ministry of Physical Planning and Urban Development, LASEPA, Lagos State Safety Commission, IOGC) is currently increasing monitoring efforts and implementing sustainable initiatives to ensure safe oil and gas operations within the State.
Sanwo-Olu said the State is also collaborating with key industry regulators and stakeholders to ensure safety standards, regulatory compliance certificates and permits are adhered to by sector operators. Enabling ease of doing business – as part of its efforts towards improving ease of doing business in the State by reducing regulatory and bureaucratic hurdles, the Lagos State Government has streamlined the previously onerous process for obtaining relevant oil and gas permits and approvals from the State MDAs.
The Ministry of Energy and Mineral Resources has been designated as the one-stop shop for all oil and gas activities in the State. LPG Intervention Scheme – aimed at deepening use of Liquefied Petroleum Gas (LPG) as primary fuel for domestic and roadside cooking.
The State Government through Ibile Oil & Gas Corporation has commenced the deployment of a State-wide retail network of strategically located neighbourhood LPG Skid Plant Stations across the five divisions of the State, offering residents the opportunity to easily access LPG to refill their cylinders at a consistently stable price.
In addition, the State has also commenced implementation of an LPG reticulation programme for structured estates and high rises.
Promotion of Auto-Gas
In line with the Federal Government’s commitment to emission reductions through the National Gas Expansion Plan, one of the key target areas in the collaboration with the State Government through IOGC, is the introduction and deployment of Auto-gas.
The Lagos State Government Gas for Transport initiative will involve:
The deployment and roll out of LPG and Compressed Natural Gas (CNG) conversion centers in partnership with Original Equipment Manufacturers (OEMs) Rolling out Auto-gas dispenser on the forecourts and standalone Auto-gas stations across the five divisions of Lagos State. IOGC’s existing and future Retail Filling Stations in strategic locations across Lagos is expected to be an enabler for Gas for transport.
The Governor explained further that significant opportunities exist for the downstream sector in the global transition with potentially huge returns on investment for well positioned players. Strategic collaboration among the various stakeholders across the value chain is key to maximising full potential of the sector and ensuring its sustainability in the long term.
Thus, the State Government is ready to drive institutional framework that will provide a conducive, investor friendly environment to encourage and support private sector investments. Lagos State also plays a pivotal role in the Nigerian economy as the Nation’s commercial nerve center and remains the focal point of the country’s economic activity.
The State Government is fully committed to supporting private sector innovations targeted towards driving sustainable economic growth and making Lagos State become a 21st century, low carbon, economy.
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