Adedapo Adesanya
By Adedapo Adesanya
Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) has gazetted a number of regulations under the Petroleum Industry Act (PIA), a key one of which is on the Gas Transportation Tariff.
Recall that former President Muhammadu Buhari signed the much-delayed PIB into law in late 2021.
The regulation says that transportation tariffs would be determined and charged in United States Dollars or other foreign currency.
However, payment would be made in such respective foreign currency or its Naira equivalent at the open market rate published by the Central Bank of Nigeria (CBN).
This guideline which is directed to shippers, that is, persons other than an operator licenced by the authority to ship gas through a system, would be charged transportation tariff for a capacity charge, commodity charge and any other charge as may be prescribed by relevant code.
It was also noted that the transportation tariff shall be paid by shippers on monthly basis in arrears.
Notwithstanding regulation 6(2) of these regulations said, the provisions of the Gas Network Code Framework Agreement should be applied.
The regular also noted that the previous gas transportation agreement existing under a gas transportation pipeline on open access or gas transportation network should, from the commencement of these regulations, cease to be effective and is replaced by a gas network code framework agreement.
Capacity charge means a charge determined by the amount of a shipper’s registered system entry capacity at a system entry point or registered system exit capacity at a system exit point and payable by the shipper irrespective of whether the reserved capacity is utilised or not.
Explaining what a commodity charge is, the authority noted that it is a charge determined by the quantity of gas flow at a system point attributed to a shipper that varies in direct proportion to the actual throughput of natural gas by a shipper.
NMDPRA also pointed out that it may approve different classes of capacity charges for the same gas transportation pipeline or gas transportation network.
The classes of capacity charge under regulation 7(1) of the regulations may be determined with reference to gas transportation networks and gas transportation pipelines on open access, depending on the types and industries of the end-users of the natural gas transported by shippers, based on the criteria approved by the authority, or agreements with shippers facilitating the financing of new gas transportation pipeline, and another basis as may be approved by the agency.
Alternatively, with respect to gas transportation pipelines for its own account of an operator.
