The Year 2020: A promising start to a decade of gas

As the year 2020 comes to an end, it is noteworthy to review key events and happenings in what has been an unprecedented year for Nigeria’s gas sector given the challenges occasioned by the COVID-19 pandemic.

The year kicked off with a strategic christening of it as the Year of Gas by Timipre Sylva, minister of state for petroleum resources. The Nigerian International Petroleum Summit in January foreshadowed the progress that was to come in the sector with robust discussions on increasing the role of local players in the sector and attracting investments in the gas sector.

In terms of projects, the Ajaokuta- Kaduna- Kano ( AKK) pipeline project, a 614km-long natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC) stands out as the flagship project of the year.

The project forms a section of the Trans-Nigeria Gas Pipeline (TNGP) and has the capacity to transport about 2.20 billion cubic feet of gas when completed. The construction of the pipeline is buoyed by the launch of the Nigerian Gas Transportation Network Code (NGTNC), which is a vital step in ensuring transparency for the transportation of gas in Nigeria.

The year 2020 also witnessed commendable private sector led gas distribution and infrastructure projects necessary for improving gas supply across the country. These projects include the expansion of the gas distribution network in Ikorodu by Falcon Corporation Limited, the development of the Sagamu Gas Distribution Zone by Transit Gas Nigeria Limited, a subsidiary of Axxela Limited, the 20km gas pipeline recently completed by Shell Nigeria Gas (SNG) to take gas to commercial and industrial hubs in Aba, the gas distribution facility to connect the 55MW Ossiomo IPP and other industrial clusters in Edo state by QSL Gas & Power Ltd and the Nigerian Gas Marketing Company (NGMC) amongst others.

Read Also: What Nigeria can gain by optimizing value addition for economic benefits

Agreements were also signed for the development of other projects such as the gas distribution facility being developed by SNG in partnership with the Nigerian Content Development Monitoring Board (NCDMB) in Polaku, Bayelsa State and the signing of an MOU for development of gas distribution infrastructure to Ibadan axis by SNG.

Another key project just recently commissioned is the 200 mmscf/d Integrated Gas Handling Facility (IGHF) and Liquefied Petroleum Gas ( LPG) Storage Dispensing Unit wholly owned and constructed by the Nigerian Petroleum Development Company (NPDC) in Ologbo, Edo State. These in addition to the bulk storage LPG depots built by Rainoil and Techno oil respectively, provides critical infrastructure required to increased and deepen our LPG penetration in the country.

This is a testament to the investment opportunities in our gas sector and we hope to see a continuation of this confidence by the private sector in replicating the build out of such critical gas infrastructure in other parts of the country in 2021.

Policy advocacy and reforms have been another major highlight of the year with industry experts and regulators engaging in extensive dialogue on pressing issues tied to the success of the sector.

Gas pricing has been a longstanding concern with calls for a review of current policies and practices to attract investment in the gas sector. In response to these concerns, a committee charged with evaluating and reviewing the price of gas in the country was inaugurated by the Minister of State for Petroleum Resources this year. Chaired by Yusuf Usman, chief operating officer Gas and Power, Nigerian National Petroleum Corporation, the committee continues to reach across professional and industry lines in their bid to execute a gas sector-wide review of the domestic gas pricing framework that puts the interests and benefits of all parties into consideration.

To effectively promote gas utilisation and deepen the domestic use of gas, The National Gas Expansion Programme ( NGEP) was also launched this year. It’s driving mandate being the creation of frameworks for the utilisation of Compressed Natural Gas ( CNG) and Liquefied Petroleum Gas (LPG) as clean alternative sources of domestic energy in Nigeria. A key component of the NGEP’S activities has been the sustained push for the adoption of autogas as the preferred option for automobiles and other prime movers.

With Nigeria’s autogas scheme officially launched on the 1st of December, 2020 by President Muhammadu Buhari. To support the NGEP, the CBN came up with the N250bn gas intervention facility, the largest ever gas sector fund to stimulate private investments in the gas value chain.

Whatever 2021 holds in store, it is clear that the dynamism and drive that has propelled the gas sector is set to continue given the Federal Government’s declaration of Jan. 1, 2021, to Dec. 31, 2030, as “The Decade of Gas Development for Nigeria”. This declaration made by Sylva, at the Seventh (Virtual) Joint International Energy Forum and International Gas Union ( IEF- IGU) Ministerial Gas Forum in Malaysia is a commitment to promoting longterm investments and making gas a priority in the nation’s economic policy.

The proclamation of the decade of gas is timely in view of the energy transition and the consistent calls for a shift from dirty fossil fuels towards cleaner and greener sources of energy.

Gas provides an opportunity for Nigeria as the transition fuel given its unique quality as the fossil fuel with the lowest carbon footprint and up to 54 percent lower carbon emissions than the traditional sources of oil and coal.

The onus now lies on the policy makers to do all that is required for creating the enabling environment to further attract much needed investments required to make 2021 to 2030 a decade of gas for Nigeria.

Oga Adejo-Ogiri is the principal consultant at Vappax Advisory, an Energy Consulting and Advisory firm based in Abuja and executive secretary of the Association of Local Gas Distributors.