Nigeria has seen its gas production drop in recent times amid rising demand in the domestic and international markets.
Operators have said there is a need to bridge the infrastructure deficit in the oil and gas industry and tackle the security challenges limiting production.
They spoke during a panel session at the ongoing 6th Nigeria International Energy Summit in Abuja.
Dabotekenari Alabo, general manager, crude oill and gas commercial at TotalEnergies Nigeria said domestic consumption has grown to about 2 billion cubic feet (bcf) daily since the ‘Decade of Gas’ project started, but gas production has reduced to 7bcf of gas daily in the same period.
“We have challenges; for example, there is no compression on NGC, so gas cannot get to the customers: If you do not get wells drilled or build facilities to process gas, there will be no gas on the end market,” he said.
Philip Mshelbila, managing director of Nigeria LNG Limited (NLNG), said the company has been producing since 1999 and is now constructing its 7th train, which is at 40 percent completion.
The company’s six trains in operation are almost half empty because there is no gas for it, he said.
“Demand has soared to levels we have never seen before; prices last August were at record never seen before. This was the period we were having the lowest gas supply ever; so we could not be there to play in that market,” he said.
Mshelbila said that while countries like Qatar and the United States were locking themselves to 15-20 year contracts in the gas market, Nigeria could not meet its obligations to existing customers, much less sign up new customers or new contracts.
“We have got to fix the security situation immediately and it will unlock at least 30 percent out of the 40 percent gap we have in NLNG; we have huge reserves of gas in the deep water that have not been tapped into; for the medium to long term, we need something above the Petroleum Industry Act to address dry gas, particularly offshore,” he said.
Ed Ubong, president of the Nigerian Gas Association, said Nigeria is facing an urgent gas supply crisis, which poses significant risk if not addressed promptly.
He said to actualise the ‘Decade of Gas’, implementation must commence immediately and must be achieved over a 12-18-month period, adding that 300 million scf of gas can be extracted daily.
Ubong said eliminating the gas constraints to available capacity will have a significant impact on the economy and will drive a $4.7 billion growth in the power sector, $5 billion in the commercial sector, $4.4 billion in the gas based industry and $5.3 billion in exports.
“Unlocking the 3.1 bcf/d would create significant economic benefits including $14 billion in foreign direct investment, $12 billion in federal government revenue from gas royalties and taxes, and 2 million new jobs across the gas value chain,” he said.
Ubong said there is a need to enable investments by supporting key infrastructure, improve investor confidence and guarantee investors attractive returns.
Read also: Nigeria unable to meet local, international gas demands
Giving an update on the ‘Decade of Gas’ project, which is approaching its third year, Gabriel Aduda, permanent secretary at the ministry of petroleum resources, said demand for gas could grow to 22.5 bcf daily by 2030, with domestic consumption accounting for 60 percent of total demand.
He said a set of targeted initiatives have been identified for implementation over the next 12-24 months in order to unlock critical gas supply required to meet the base case demand and also unlock infrastructure investments.
Some of the initiatives highlighted include the gas infrastructure development programme, which prioritises the development of gas infrastructure such as pipelines, gas processing plants; creation of an enabling environment and funding opportunities made available along the gas value chain.
Aduda urged investors to take advantage of the opportunities in the gas space.
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