Nigeria could have been out of business in the oil and gas industry without its natural gas resources, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said.
With the continued decline of the country’s oil production capacity and export, coupled with the growing instability in the international oil market, which has seen prices crashing to all-time low levels, the government is under pressure to look for alternative funding for the economy away from oil export revenue.
Mr Kyari who spoke during a virtual meeting of the Gulf Intelligence Global UAE Energy Forum 2021 on Wednesday said Nigeria was taking its domestic gas production capacity growth and exports seriously in line with the current global trends in search of alternative revenue pillars for the world economies.
More gas in energy transition mix
Speaking on the long-term trend in terms of the global energy transition, Mr. Kyari said the world is likely to see more presence of gas in the energy transition mix, with much faster forecast of growth than oil, as the industry goes forward.
“Gas is where everybody is going. And the global oil and gas market is showing that. We (Nigeria) are also taking that direction. We are increasing our domestic gas production capacity and also taking our gas exports seriously as everybody else in doing. Without gas, today Nigeria would have been out of business,” he said.
Nigeria is reputed to be a gas province producing oil. Current estimates show the country’s gas reserves and potentials are more than oil equivalent by about ten times.
Nigeria’s endowment in natural gas contingent (discovered) reserve is estimated at over 600 trillion standard cubic feet, which is conservatively at least ten times the volume of producible crude oil reserves.
This is outside additional 209 trillion cubic feet of prospective reserve, with over 90% chance of producibility, according to oil and gas industry expert, Joe Nwakwue, a petroleum engineer, and Partner, Zera Advisory & Consulting.
So far, there is no policy by the government to deliberately search for and develop the country’s natural gas potentials.
The proven reserves so far discovered were accidental, primarily in the course of exploration for crude oil (associated gas).
Mr Nwakwue said even the associated gas reserves discovered have not been adequately utilized for value addition to the economy.
Apart from the small volume used as reinjection feedstock in oil wells to boost oil production, the bulk of the resource have been wasted through gas flares, with their attendant environmental consequences.
Nigeria’s gas utilization initiative
But, in recent times the government has rolled out several programmes to promote gas development in the country, particularly he development of infrastructures that utilize gas.
The Nigerian Gas Transportation Network Code (NGTNC) is to open up opportunities in the petroleum industry for investors in gas transportation infrastructure and market participation as shippers, agents, and suppliers.
The opportunities include several gas anchor programmes, with potentials for job creation and poverty alleviation among Nigerians.
Under the National Gas Expansion Programme (NGEP), the government aims to stimulate growth of the liquefied petroleum gas (LPG) and compressed natural gas (CNG) sub-sectors; develop gas-to-people structures; ensure policy guidelines implementation, regulations and Department of Petroleum Resources (DPR) guidelines.
To boost the government gas commercialization agenda, the ministry has continued to pursue its CNG and LPG penetration programme to encourage Nigerians to use compressed natural gas (CNG) and liquefied petroleum gas (LPG) (cooking gas) as alternative sources of fuel in the country.
The government is also pursuing the Nigerian Gas Flares Commercialization Programme (NGFCP) aimed at eliminating gas flaring through the development of market-driven and commercial structures for third-party investors to deploy proven technologies to harness flared gas to the market.
The Nigeria LNG project has continued to expand its production capacity and export. The final investment decision (FID) was taken in December 2019 for the construction of Train 7 of the project.
On completion, the production capacity of the six-train plant would expand exponentially by 35 percent, from the extant 22 million tonnes per annum (MTPA) to 30 MTPA, and boost Nigeria’s competitiveness in the global LNG market.
The 614 kilometers-long Ajaokuta–Kaduna–Kano (AKK) pipeline project being executed by the NNPC and its partners is on course towards its completion in 2023.
On completion, the pipeline system from the Ajaokuta terminal gas station (TGS) in Kogi state will transport up to 3,500 million cubic feet (MCF) of gas per day from various gas gathering projects in Niger Delta through Niger and Kaduna States, to terminate at a gas station at Kano State.
The 1,300-kilometres-long Trans-Nigerian Gas Pipeline (TNGP) project is also being developed as part of Nigeria’s Gas Master Plan to utilize the country’s surplus gas resources for power generation as well as for consumption by domestic customers.
The TNGP project also forms part of the proposed 4,401-kilometres-long Trans-Saharan Gas Pipeline (TSGP) to export natural gas to customers in Europe.
Also, the FID was taken on the regional $3.5 billion West African Gas Pipeline Project (WAGP).
The pipeline project is a gas transmission system in sub-Saharan Africa designed to supply gas from Nigeria’s Escravos region in the Niger Delta to Benin Republic, Togo and Ghana.
There are also ongoing projects to harness the country’s gas resources year to guarantee the supply of electricity to the national grid.