Business - Business & Economy - News - Oil & Gas - October 29, 2021

NES#27: Nigeria must leverage its gas potentials to play in global energy transition – experts

MEDIATRACNET

Nigeria must leverage on its huge potentials in gas resources to play a big role in the global energy transition, energy experts who participated in the recently concluded Nigerian Economic Summit said.

Nigeria is reputed to be among the ten world leaders in gas resources with proven gas reserves in excess of 206 trillion cubic feet.

With such endowment, which is more than ten times her potentials in crude oil reserves, Nigeria is known to be a gas province producing oil.

With the current global energy transition from dependence on fossil fuel to renewable energy as a result of the use of technology to find alternative and cheaper sources of energy, concerns have been expressed that Nigeria risks being left behind if steps are not taken to harness her potentials in gas resources to her advantage in the global energy mix.

The Chief Executive Officer, Consistent Energy and President Renewable Energy Association of Nigeria, Segun Adaju, said Nigeria needs to look at where she is in terms of her competencies and comparative advantage to create a significant impact in the global energy transition.

“We must display efficiency on the huge resources we have to power Nigeria. Gas for cooking in rural communities will be more efficient and cheaper than using solar power,” he said.

Nigeria, he said, is known as the generator capital of the world, with 10 to 14 million generators (the highest number in the world) being used to generate electricity in homes.

With such number of generators, he said estimates showed about $16 billion is spent to fuel the generators every year.

He said finding a way to displace the use of generators, by utilizing the huge gas resources to generate electricity, would be a positive way forward.

On the issue of electrification, he said studies have shown that half of the country is not connected to the national grid, meaning it is the infrastructure that is needed to build to increase the country’s electricity generation capacity to at least 30MW.

He commended the Federal Government for the initiative to invest in between 8000 and 10,000 viable sites identified as micro and mini-grids, to electrify every part of the country.

For the Managing Director, Oolu Solar, Doseke Akporiaye, Nigeria should not look at her energy transition challenge from demographics and competitive perspectives, but from the possible combination to electrify Nigeria.

She identified the absence of regulation in the gas sector and policy summersault as the biggest challenge.

“Focus must be on incentives to boost local manufacturing. Each geo-political zone has something to contribute. About 60% of electricity in Nigeria is consumed by residents, while manufacturers are self-dependent. It is important we have a clear regulatory framework for this transition to work,” she said.

Also, the gap between generation and supply must be closed, with a focus on affordability, while something must be done to resolve the policy implementation challenge.

“We must focus on affordability, and we cannot do that without incentives that will bring cost down (like tariffs, taxes) and utilising all available resources to bring electrification to Nigeria.

“The informal sector needs to be captured in the energy mix for us to be able to produce more, to complement the biggest investors, the IOCs who have invested so much in the sector.

“Building the ecosystem is healthy enough to take the heavy lifting to the next level. Collaboration is needed for that to happen,” she said.

The Managing Director/CEO, Nigeria LNG limited, Philip Msheibila, in his contribution said renewable is here to stay and Nigeria must face up to the reality.
At NLNG, he said they are trying to see how to contribute its quota to power Nigerians via hydro, geo-termal, solar, wind as pilot schemes, working hand in hand with the government through the Rural Electrification Agency.

He spoke of efficient pricing and creation of a level playing field, creating tax incentives and many more for there to be effective transition.

The NLNG boss said Nigeria was suffering from huge gas flaring problems until the company came into existence.

Since then, he said the company has contributed immensely, by reducing gas flaring by 60%; contributed to tackling of climate change, and is one of the biggest tax payers for infrastructure development.

Apart from creating a huge employment, with over 18,000 youths employed, he said the NLNG has contributed enormously to the global energy transition.

On the contribution of the NLNG to the development of the gas sector, Msheibila said in addition to the export of gas, the NLNG accounts for nearly half of the liquefied petroleum gas (LPG) consumption in Nigeria comes from NLNG.

“Everything we need to electrify Nigeria is here. All we need to do is to go ahead to execute the policies. However, we must build the people’s capacity. We also need the funding. How to access it is an issue that requires an answer,” he said.

The Managing Director of Shell Nigeria Gas, Ed Ubong, said irrespective of the electricity challenges that exist, gas is in abundance in Nigeria.

“We must find a way to industrialize the gas sector in the Niger Delta. We must see what we can do to reactivate the industries, build a viable and fordable electricity sector,” he said.

With over 40 million registered small and medium enterprises (SMEs) in Nigeria, he said if this is leveraged upon, the country can generate more electricity.

He said one of the ways to go is to create power investment clusters in the country like is being done in South Africa, to provide independent power generation and supply.

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