National Energy Policy - Final Draft - 14 Nov 2013

2. Exploration and production of natural gas is highly capital intensive.3. Inexistence of gas infrastructure to support gas discovery and development.4. High cost of gas infrastructure both offshore and onshore.5. Inability to disaggregate into component elements of supply chain e.g cost of wholesale Gas,transportation and distribution in order to price the gas.6. Inherent weaknesses in Cap. 308 and the model PSC which include lack of provisions for:(a) Gas sharing terms.(b) Environmental protection, conservation and management.(c) Inadequate policy in profit gas revenue sharing and management.7. There is no world gas price like in the case of oil.8. Inadequate manpower, technical capacity and local content in gas exploration and productionactivities.9. Lack of gas master plan.10. Potential for Gas flaring especially from oil producing fields. Gas flaring is a practice that is mostoften linked with the simultaneous production of oil and natural gas where there is no readymarket for the gas. This is performed by safely burning off the associated gas. This approachwas historically accepted as industry standard; however the increasing focus on the impact of oiland gas production on the environment, combined with the increasing value of gas, makesindiscriminate flaring untenable. However, there are instances when it is necessary to flareassociated gas production. This is normally in relation to preventing excessive pipeline pressureand/or in response to a specific emergency (such as equipment failure).2.3.6.2 Challenges in Natural Gas1. Lack of a regulatory framework for natural gas development and production.2. Lack of infrastructure for exploitation and use of natural gas, such as LNG liquefaction plants,natural gas pipelines, etc.3. Lack of legal regulatory and fiscal framework to facilitate the export options as the easiest andquickest option to monetize natural gas discoveries.4. Lack of facilities to exploit natural gas reserves, e.g., power plants, petrochemical plants, andfertilizer plants.5. Lack of infrastructure for supply to commercial, industrial and residential consumers.6. Lack of gas master plan.2.3.6 Policies and Strategies - Natural GasPolicies and StrategiesImplementation Plan36 NATIONAL ENERGY POLICY FINAL DRAFT NOVEMBER 2013