Nigeria has abundance of gas, but this has not robbed off positively on the country, as it wallows in shortage of power. This is the reality in Africa’s top oil and gas producer. Realigning these two issues for the benefit of the country has been a daunting challenge due to lack of investment in infrastructure needed to take the gas to the power plants.
Getting gas to power plants would require huge financial commitments by investors. For the country to meet the power requirement of Nigerians, government must court the relationship of investors with deep pockets who can invest for a long period, which is what both the gas and power sectors require to be able to provide stable and reliable power supply.
The investors must also be guaranteed good returns on their investments and a stable policy that would also guarantee an enabling operational environment for them.
According the operators, the demand for gas will continue to rise especially as the invention of electric car is on the rise.
Victor Eromosele, chief executive officer of ME Consulting, said that Nigeria needs power from all sources, either from fossil fuel or off grid, adding that there were about $4 billion investment opportunities that can be tapped into by investors to bring power to Nigeria homes by adding value to the gas resource . He said there were huge gas resources in the Niger Delta, adding that much of this should have ended up in form of power in our various homes if the necessary investments are made.
We must monetise the nation’s gas by putting it into values that can enhance the economy.
Already there are a number of gas projects ear-marked for execution in the country by the Nigerian National Petroleum Corporation NNPC. Only two of these projects have had their Final Investment Decisions (FID) taken.
These gas projects are valued at $14 billion, while between $2.2 and $2.7 would be required for pipeline infrastructure alone to move gas molecules.
Currently, the amount of stranded gas in Nigeria is about the equivalent of 5.2 Gigawatts or 5000 megawatts. Stranded gas is the gas that cannot be delivered to power plants because of infrastructural challenges, such as lack of pipelines. Industry operators blame this on lack of investments in the sector, which they trace to investor apathy.
This amount of gas can make a lot of impact on the power supply situation in the country if it is delivered to power stations.
On the power sector, Anthonia Okoh of Standard Chartered Bank, advised that the government must get its acts together in order to attract the interest of international financial institutions
“We must create the environment that makes international investors have trust in our system and operational environment that government would not change the goal post in the middle of the game.”
She said the government must de-risk the sector by making the power value chains to work, stressing that unless this happened, financial institutions would not participate in the power sector. “If there is a break in the value chain the investors would be discouraged and they will withdraw.”
One estimate puts off grid fossil power generation at about N4.4billion a year which is spent in the country on generating self-power. Nigeria needs power from all sources either renewable or fossil fuel.
The Niger Delta is a gas province with just a drop of oil. Unfortunately, much of the gas that should have been used for households is being flared with cost implications. To convert flared gas into money requires finance.
As the world focuses on electric cars, the demand for gas will continue to grow and oil will be less in demand. Many countries will soon ban Internal Combustion Engine (ICE) cars which is in use throughout the world. This is expected to commence as from the year 2040.
The current global trend concerning gas is that transportation still accounts for about 26% total oil and gas which still gives hope for oil. Gas will grow because it is relevant as transition fuel. It is transiting from dirty fossil to cleaner fuel. Gas will remain significant because it is the cleanest of fossil fuel and it has taken over from coal. Coal has lost relevance while gas has also overtaken it.
At present, gas is the fastest growing energy in the world. It is growing faster than oil and coal.
Olusola Bello
