FG cuts NNPC gas budget by N155bn

The Federal Government has slashed the Nigeria National Petroleum Corporation’s Gas Joint Venture budget for 2011 by N155bn.

According to the budget presentation of the NNPC to the National Assembly Committees on Gas Resources, the firm made an appropriation request of $10.203bn (about N1.53tn) for its gas projects for 2011, but the Budget Office cut it down to $9.172bn (about N1.37tn).

The breakdown of NNPC’s request showed that the total Federal Government equity is $7.90bn with an alternative funding of $2.30bn.

It also plans to spend $2.24bn on domestic gas production and an additional $1.89bn on gas supply.

Also, $342m was earmarked for the Joint Venture Independent Power Projects, while the total base cash call budget was put at $5.64bn.

The schedule indicated that a total of $1bn had been secured through existing MCA’s, but indicated a funding gap of $1.3bn for 2011.

The cut in the budget of agencies in the 2011 budget is a common feature as many of the agencies had complained of inadequate fund allocation by the Ministry of Finance in this year’s budget.

The National Assembly Joint Committee on Gas Resources had last week summoned the Minister of Finance, Olusegun Aganga and the Director-General of the Budget Office, Bright Okogun, to explain why more funds would not be given for the development of gas pipeline projects.

Members of the committee were worried over the Federal Government’s light treatment of issues affecting gas to power infrastructure necessary for the attainment of the administration’s power sufficiency goals.

The Chairman of the Joint Committee, Senator Osita Izunaso, noted that the ministry’s 2011 budget was completely disconnected from the 2010 budget, saying it did not show any serious developmental trend.

He said, “Why is it that all the issues we raised before concerning certain projects before NNPC none has been answered? We have raised important issues in the past, we have talked about Chevron Gas to liquid project, they have not given us answer, we have talked about trans-Sahara gas pipeline no answer has been given to us among others, even the West Africa gas pipeline, we don’t even know where we are at the moment.

“I think we are going to set two days Wednesday and Thursday to look at all the issues concerning the gas sector in this country.”

However, the Chairman of the House Committee on Gas, Hon. Igo Aguma, added a twist to it, saying the NNPC budget was not before the National Assembly.

He said, “The NNPC is not here at all. We have not seen NNPC budget in 2011 and we must see NNPC budget. NNPC cannot be a lawless institution, we must see its budget. Nigerians need to know how their money is being expended. We must request NNPC to submit its budget before Wednesday.”