• Wednesday, May 29, 2024
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Domestic consumption, industrialisation remain under-tapped opportunities in Nigeria’s gas market

Domestic consumption, industrialisation remain under-tapped opportunities in Nigeria’s gas market

With its huge reserves and potential for economic transformation, the need to explore gas for domestic development and implement policies to drive its utilisation, especially as it relates to domestic consumption and industrial growth, remain a major agenda for stakeholders in the natural gas space.

Nigeria is home to the largest natural gas reserves in Africa and the ninth largest in the world but it has continued to suffer supply shortage over the years.

With less than 20 per cent of the natural gas produced in the country going to the domestic market despite huge demand, most stakeholders have advocated for a higher market penetration by putting the right regulations, fixing infrastructure and encouraging the private sector in order to unlock the nation’s huge gas potential.

ED Ubong, managing director Shell Nigeria gas said there are huge opportunities in the domestic gas market which can come through Nigeria’s industrial cycle through important sectors such as manufacturing, power, feedstock among others.

Read Also: Long-run projections for gas as transition fuel mean vast opportunities for Nigeria

With the coronavirus disrupting global energy balance, leading to declining oil prices due to low demand, the need to encourage local consumption of gas, especially for power generation in a country with a huge energy deficit remains key.

“We need to put regulations in place that will put long term clarity on the availability of gas, Ubong said. “Most Investors want to know if gas will be available in the next 10 years, not just a year contract.”

Justice Derefaka, programme manager, Nigeria’s Gas Flare Commercialisation Programme (NGFCP) said industry players need to put economic diversification as a front burner and make sure gas infrastructure is well developed across the country.

“We need to look at how to explore more opportunities in using gas to build more petrochemical industries in Nigeria,” Derefaka explained to the delegates, at the BusinessDay Energy Series, titled Gas Market Development – Opportunities, Drivers & Challenges.

Adedayo Adeshina, Manager of the implementation of Nigerian LPG expansion plan, Office of the Vice president said the downstream sector of gas which is the LPG space needs a lot of expansions most especially in the north who boast of a large population with most people still depending on local means of cooking.

“We need to ramp up more domestic production of LPG to meet local demands by incentivising the private sector to operate more in rural areas,” Adesina said.

Omotunde Hassan, CEO of Solad said that there is huge potential in the market and the government can come in with lots of interventions and policies to stimulate local consumption of gas.

Edwin Devakumar, group Executive Director of Dangote Industries Limited said Nigeria needs to use gas in adding value to raw materials which can be used in solving the country’s import substitution problems.

Though the Gas Policy is clear that to fully develop the industry, there is a need to move towards a deregulated market allowing for willing buyer-willing seller arrangements, operators note that strict regulation of the gas price for the entire gas value chain is at variance to the spirit of the National Domestic Gas Supply and Pricing Policy 2008 and the Gas Policy, which enshrines the government’s position on the achievement of a market-led pricing approach and incentivising private sector investment in the gas industry.