The Managing Director and Chief Executive of Total Upstream Companies in Nigeria, Mr. Jacques Marraud des Grottes has suggested the creation of the right business environment, made of commercially robust business models supported by law, as one way to drive growth in Nigeria's gas industry.

Other measures, Mr. Marraud des Grottes said, include the enablement of companies and joint ventures to attract capital independently and with the support of government as well as upholding the sanctity of contracts in the operating environment.

Total's Chief Executive spoke at the 7th Industry Luncheon/Talk of the Centre for Petroleum Intelligence (CPI) held in Lagos on Thursday, October 25, 2007. He added that in order to satisfy both domestic and export demand for gas, adequate power supply must be provided and high efficiency plants constructed.

According to Mr. Marraud des Grottes, plants must also be developed at the pace of transmission and distribution lines as well as the development of gas in corresponding quantities.

In the lecture entitled, "Enablers for Gas Development to Support Nigeria's Growth Agenda", Mr. Marraud des Grottes spoke on Africa's oil and gas in today's world; Nigeria's production; its aspirations; present gas growth forecasts and gas development enablers.

He said Africa had been making major contributions to crude productions growth as it had been responsible for approximately 25 per cent of the increase in the world crude reserves in the past 10 years.

Africa, he added, is well positioned to supply the domestic market as well as the Atlantic Basin gas market, adding that projects were in abundance to support this - 28 power plant projects, 28 industrial projects, 2 new large LNG projects and 3 export pipelines projects, all of which are at different degrees of maturation.

He listed "Gas Production Sharing Contracts (PSC) fiscal terms; AGFA regime for concessions, until all major infrastructures are on ground; investors' confidence in the long term by adhering to the sanctity of contracts and freedom to sell discovered gas to highest bidders in a free market" as exploration enablers.

Total's Chief Executive added that "development and production enablers, on the other hand, included Gas Master Plan (GMP) collection network; GMP downstream transportation network and Commercial terms."

Mr. Marraud des Grottes also explained that among other challenges, financing of supply was crucial, noting that the stakes of the power sector were high, citing the present gas consumption in the country, the base case government scenario as well as probable case government scenario.

He observed that Nigeria was ready to serve growth because there is roughly enough short to medium term potential for fired power and industrial "base case" gas supply, adding that longer term growth potential included the just-commenced gas focused exploration onshore and the gas focused exploration which had just commenced offshore.

On work environment, he said it was necessary to restore the confidence of contractors and sub-contractors in the Niger Delta and added that co-operation with communities should be a must.

He also noted that there was an industry cost increases challenge, adding that shortest term gas availability rests with the NNPC Joint Ventures. He suggested that funding of NNPC's share at about 60 per cent was crucial for the development of Nigeria's gas industry.