Nigerias push for a gas-driven economy has many advantages for a country with a critical energy crisis. While there are several gas-driven initiatives, unlocking the potential of the valuable resource has remained a challenge against the backdrop of dismal investment and infrastructure development, WALIAT MUSA writes.
Nigeria is endowed with significant natural gas reserves, estimated at over 200 trillion cubic feet, making it one of the largest gas-rich countries in the world. Despite the abundance, much of Nigerias gas remains untapped, representing a vast opportunity for development and investment.
While the country has historically underutilised its gas resources, focusing primarily on oil production, there is a new push by the Federal Government that aims at changing this by incentivising investment in gas infrastructure and promoting domestic consumption through targeted reforms.
Central to the gas market overhaul is a significant investment in infrastructure. This includes the expansion of gas pipelines and processing facilities to connect remote gas fields to demand centres. The Nigerian Gas Master Plan (NGMP), launched in 2008, serves as a blueprint for the needed infrastructure development, outlining strategies to improve access to gas across the country.
Major infrastructures in the sector are the multi-billion-dollar Ajaokuta-Kaduna-Kano (AKK) and Obrikom, Obiafo, Oben (OB3) gas pipeline projects to meet their completion deadlines. There have also been discussions on the Nigeria-Morocco Gas Pipeline (NMGP) that is to traverse the Republic of Benin, Togo, Ghana, Cote dIvoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, The Gambia, Senegal, Mauritania and terminate in Morocco with a spur to Spain for onward sale of gas to Europe.
Also, the revitalisation of the virtual pipeline mode of gas delivery CNG, Small Scale LNG (SSLNG or mini-LNG) for gas supply to power GBI and the commercial sector and the commissioning of the ultra-modern 23,000 metric tonnes LPG vessel, Temile 10, which is set to achieve further development of the in-country capacity to transport LPG from producers to the domestic market are examples of the infrastructural development in the sector in few months.
As part of efforts to drive the infrastructural growth of the sector, the groundbreaking ceremonies for NesGas 50,000 metric tonnes LPG Terminal at Onne, Rivers State, has been done as well as that of Optimera Energy Natural Gas facility in Lekki Free Trade Zone, Lagos; Windek Energy Limited 20,000 metric tonnes LPG depot in Atabrikang Aquaha, Ibeno LGA, Akwa Ibom State, which holds the prospect of generating over 100,000 jobs on completion.
One of the primary goals of the policy overhaul is to diversify Nigerias energy mix by increasing the share of gas in the countrys energy consumption. Natural gas, being cleaner and more environmentally friendly than coal or oil, offers a viable alternative for power generation, industrial use, and domestic cooking. By promoting gas-to-power projects and incentivizing industries to switch to gas, Nigeria aims to reduce its carbon footprint and improve air quality.
A critical component of Nigerias gas sector overhaul is the reform of the power sector to increase gas utilization for electricity generation. Investments in gas-to-power projects, including the construction of new gas-fired power plants and the rehabilitation of existing ones, are vital for improving electricity access and reliability.
Through the promotion of gas-to-power projects, there is an inter-ministerial gas task force between the Ministries of Power and Petroleum (Gas) to address the challenges associated with low gas supply to gas-fired thermal power plants in the country, supervise and ensure the resolution of gas supply issues to the 141MW Geometric Power Plant in Aba, Abia State which was commissioned on Monday, February 26, 2024.
The current administration pushed through the Decade of Gas to resolve legacy indebtedness to gas producers in the power sector and ensured the release of the base price of domestic natural gas for the strategic sectors.
The revitalisation of Nigerias gas market holds immense potential for driving economic growth. Increased gas production and consumption are expected to create numerous job opportunities across the value chain, from exploration and production to transportation and distribution. Furthermore, a thriving gas sector will attract foreign investment and boost revenue for the government, providing much-needed funds for infrastructure development and social programs.
Investments in gas exploration and production are critical for expanding Nigerias reserves and boosting domestic supply. The government has introduced fiscal incentives and streamlined regulatory processes to encourage investment in exploration activities.
The current administration had boasted of attracting increased investments by foreign and local firms into the gas sector, while resolving the execution of the Gas Sales Purchase Agreement (GSPA) for Brass Methanol Project to unlock $3 billion investments in the gas industry.
Beyond its domestic ambitions, Nigeria aims to position itself as a major player in the global gas market. The countrys strategic location on the Gulf of Guinea gives it a natural advantage in exporting liquefied natural gas (LNG) to international markets. With the expansion of LNG infrastructure and the development of new gas fields, Nigeria seeks to enhance its competitiveness and solidify its position as a leading LNG exporter in Africa.
Key to achieving net zero flare gas emissions is the development of infrastructure to capture, process, and distribute flare gas. Investments in gas processing facilities, pipelines, and power plants are crucial for unlocking the full potential of flare gas recovery projects. The Nigerian government has ensured a firm commitment to achieve net zero flare gas emissions which has seen the NNPCL/TotalEnergies Joint Venture achieve zero routine gas flare in all its Nigerian assets and provided steer on flare gas elimination and methane abatement.
Nigerias gas sector is undergoing a period of transformation driven by policy review and action, with bold reforms and targeted interventions, the government is positioning the gas sector as a catalyst for economic growth, industrialization, and sustainable development. With the recent supervision of the domestication of all LPG produced within the country with the target of stabilising the price of LPG in the domestic market, Sustained initiative in engaging stakeholders on terms to unlock deepwater gas and ensuring the implementation of the PIA by regulators to unlock the potential in the gas sector to achieve a gas-based economy, Nigeria is poised towards a prosperous and sustainable future.
Minister of Petroleum (Gas) Ekperikpe Ekpo at the ceremony for the Windek Energy 20,000 Metric Tonnes LPG Depot Project in Atabrikang Aquaha, Ibeno Local Government Area, within the Liberty Oil and Gas Free Trade Zone in Akwa-Ibom State, described investments in additional LPG depots as a significant milestone in Nigerias journey towards energy security and economic prosperity.
He said: The establishment of this LPG depot underscores the importance of strategic investments in the gas sector, which is pivotal for driving industrialization, creating jobs, and improving the livelihoods of our people. As we gather here today, we reaffirm our collective resolve to harness the immense potential of our nations natural resources, particularly in the gas sector. Nigeria is blessed with abundant gas reserves, and it is incumbent upon us to leverage these resources efficiently and sustainably for the benefit of current and future generations. Ekpo mentioned that the development of LPG depot holds immense promise not only for the host states but for the entire nation.
It will enhance access to clean and affordable cooking fuel, thereby promoting public health and environmental sustainability. Moreover, it will stimulate economic growth by catalyzing investment, fostering innovation, and facilitating the emergence of new industries and value chains, he said.
On Nigerias energy crisis, Ekpo underscored the importance of collaboration and cooperation in addressing the challenges and seizing the opportunities that lie ahead.
In an era marked by rapid technological advancements, evolving market dynamics, and growing global consciousness towards sustainable practices, we must work together to navigate these complexities and chart a course towards sustainable development and prosperity. I am compelled to emphasize that Nigeria, endowed with over 208Tcf in proven gas reserves, should not be grappling with energy poverty. It is imperative for us collectively to confront these challenges head-on, he said.
Gas-power economy, according to most stakeholders, is necessary to aid energy diversification as Nigeria currently relies mostly on oil. By embracing gas, the country can diversify its energy mix, reduce its dependence on a single commodity and enhance energy security. Through that, the economy would reduce its carbon footprint and contribute to global efforts in combating climate change.
Similarly, embracing gas helps improve air quality, reduce pollution-related health issues and protect the environment. It also plays a vital role in power generation. Nigeria has been grappling with significant challenges in its electricity sector, including inadequate power supply and frequent blackouts. Gas-fired power plants offer a reliable and efficient source of electricity generation. Expanding gas infrastructure and promoting gas-powered plants can help address the nations power deficit and contribute to economic growth.
While the government is also pushing the autogas industry, it was cheering news when the oil marketers noted that about 800 tankers that formerly transported petrol to filling stations were being converted to start moving gas to retail outlets, in addition to the existing 4,000 trucks of Dangotes companies running on gas. The icing on the cake is the governments identification of over 10,000 stations across the country that would dispense autogas to the public.
Embracing gas as an energy source is crucial for our sustainable development. By leveraging its abundant gas reserves, industry experts say the country can address environmental concerns, diversify its energy mix, improve power generation, stimulate industrial growth, meet domestic energy needs and unlock significant economic opportunities. Ultimately, it is a win-win for the government, the governed and our environment.
Chief Executive Officer of Diary Hills Limited, Kelvin Emmanuel, said that while the executive order on fiscal incentives for companies willing to invest in the upstream for non-associated gas is commendable, the Ministers performance has been below par as he is not a subject matter expert.
Emmanuel urged the minister to provide counterpart funding for export pipelines like the NMGP long after the engineering design and validation studies were completed. He also urged the development of a framework that would enable Nigeria Gas Management Limited, as a subsidiary vehicle of NNPCL, to invest in Joint Ventures for floating LNG terminals offshore as a means to reduce re-injection and eliminate flaring.
You must be logged in to post a comment.
Why are you flagging this comment?
I disagree with this user
Targeted harassment - posted harassing comments or discussions targeting me, or encouraged others to do so
Spam - posted spam comments or discussions
Inappropriate profile - profile contains inappropriate images or text
Threatening content - posted directly threatening content
Private information - posted someone else''s personally identifiable information
Before flagging, please keep in mind that Disqus does not moderate communities. Your username will be shown to the moderator, so you should only flag this comment for one of the reasons listed above.
We will review and take appropriate action.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardians leading coverage of Nigerian and world news, business, technology and sports.
Follow Us