The Rivers State Government and Shell Nigeria Gas (SNG) have signed a Memorandum of Understanding (MoU) for the distribution of gas to industries in the Greater Port Harcourt area and its environs. The MoU sets out broad terms and conditions to guide co-operation between the two parties in the development of new gas distribution opportunities in the Greater Port Harcourt area and its environs in addition to its existing gas distribution network in the State.
“The agreement is key in the efforts of the government to boost industrialization in Rivers State,” said Richard Hart, Permanent Secretary in the Ministry of Energy and Natural Resources, who signed for the government. “We believe that the agreed terms in the MoU will lead to the signing of the “Build-Operate-Own-and Transfer” (BOOT) agreement early next year so businesses can begin to reap the benefits of a steady source of energy.”
Natural Gas is one of the main natural resource deposits in the Oil rich Niger Delta. Proven reserves estimates that Rivers State has 196trillion cubic feet of natural gas, which makes it the fourth largest deposit of natural gas in the world. Natural gas can be used to power the electricity needs of the Nigerian Economy, and can be make a powerful export for Nigeria, when it stops flaring, rather converting the gas to power industries both at home and abroad. Shell Nigeria Gas (SNG) is applying the principle of a sole gas supply to the domestic market as a means to earn a tax holiday from the federal inland revenue service under the two tier tax system in which Companies that are focused on upstream production sector are taxed for royalties (Production Profit Tax Act) and Corporate Income Tax.