• Sunday, June 16, 2024
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EU proposes gas as ‘green energy’ in boost to Nigeria’s reserves

EU proposes gas as ‘green energy’ in boost to Nigeria’s reserves

The European Union has proposed labelling natural gas as a ‘green energy’ source, a development that could translate into huge economic value for Nigeria that has over 206 trillion cubic feet (tcf) of proven gas reserves valued at over $803.4 trillion.

Nigeria along with other gas producers have been campaigning for the inclusion of gas as a clean energy source following the United Nations Climate Change Conference in Glasgow, where countries expressed a desire to end funding for fossil fuel projects.

Natural gas, while a fossil fuel, generally considered a dirty energy resource, is one of the cleaner fuels and exists in abundance in Nigeria and on the African continent. Proven gas reserves on the continent, according to figures from global data firm Statista, is about 624tcf.

This proposal will pave the way for new European investments in natural gas in Africa, and will therefore allow Europe to unlock billions of euros in finance and sustainable energy funds to support gas as a transitional energy source, said the African Energy Chamber (AEC), an African energy policy think tank based in South Africa.

The AEC hails the EU’s proposal as a watershed moment that justifies a positive outlook for an inclusive energy transition for Africa because the idea that natural gas can be used as a transitional energy source has long been promoted by African nations.

According to the chamber, the current Western pressure to adapt to cleaner energy systems has been exclusive in its recognition that the transformation may range in shape and timing from one region to the next.

NJ Ayuk, executive chairman, African Energy Chamber, said: “The demonization of Africa’s gas industry needs to stop, and investments need to come into the sector.

“While we continue this engagement, it is important that the oil and gas industry focuses its investment on further reducing carbon emissions within the gas value chain.”

According to Ayuk, sustainable development and making energy poverty history will require Africa to increase gas within its energy mix, which will give us a fighting chance to reduce the continent’s carbon footprint, even when we are still fewer than 4 percent of global emissions.

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Africa risks being left behind throughout the energy revolution by prohibiting investment in energy sources like gas, which is counterproductive and regressive, African oil producers have argued.

“They listened, worked, and allowed us to make the case for Africa’s low-carbon Liquefied Natural Gas (LNG), and while these discussions were crucial in bringing us closer together on gas, there is still a lot of work to be done to make this a reality,” Ayuk said.

Furthermore, the AEC gives insights into the investment opportunities that would spring in the aftermath of this new proposal.

The EU proposal will improve import of natural gas from Africa and ramp project funding on the continent as well as energy security for Africa.

African countries like Nigeria, Algeria, Mozambique, South Africa, Tanzania, Senegal, Angola, Ghana, Mauritania, Libya, Cameroon, and Equatorial Guinea have taken steps to monetise their natural resources in order to develop and industrialise independently.

Nigeria LNG recently signed a contract to develop the LNG Train 7 while Mozambique in 2019 signed a $20 billion deal with TotalEnergies for new LNG projects.

By using natural gas as a feedstock to create other value-added products like petrochemicals, from fertilizers to ammonia, revenue can be used to build infrastructure, from pipelines to ports and roadways, and we can therefore open the doors to economic diversification for other African countries as well.

Nigeria declared a decade of gas from 2021 in a policy framework that seeks to harness gas as an enabler for economic development.

“Natural gas is seen as the oxygen and lifeblood of Nigeria’s socio-economic resurgence,” said Timipre Sylva, during the Nigerian Gas Association’s business meeting in December.

The government also passed the Petroleum Industry Act, which for the first time prescribed a separate fiscal framework for gas and provided generous incentives for investors. These moves would have been frustrated by campaigns to abolish funding for new gas projects.

Underscoring this fact, the AEC said despite predictions that demand for African LNG was expected to grow for the foreseeable future, investments in gas exploration had been hit hard by a short-sighted bias against our low-carbon natural gas resources.

This has led to reluctance towards investing in supply projects because of the fractured global outlook towards natural gas. The success of the proposal could change this.