• Wednesday, July 17, 2024
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Nigeria’s power sector seen as big market for its gas


The need to stimulate the exploration, production and development of the nation’s natural gas for domestic use, particularly to drive the ongoing reform of the Nigerian power sector, has been stressed by analysts.

Nigeria would benefit more by concentrating on making use of its vast gas resources to improve the nation’s electric power situation, rather than exporting them to other countries, said the analysts who spoke to BusinessDay at an event organised by Rystad Energy, independent oil and gas consulting services and business intelligence data firm.

Magnus Nysveen, partner and head of data analysis, Rystad Energy, said: “I think that the gas should better stay in the country because you need it so badly in the country. You have a lot of people who need electric energy and the most obvious source is gas.”

According to him, “LNG (Liquefied Natural Gas) exports have turned a little reverse because of the gas price in North America. There is no more LNG export to North America. So, your main market would be Europe and European gas prices are not as good as in Asia. So, I think that the LNG export is less profitable for the industry. So, now the alternative is domestic gas and that is of course the best for the national economy that the gas is being kept in Nigeria; that it has to be priced at a level that is determined by the market forces.”

“We have to develop our gas because of what gas can do for the power sector and what the power sector can do for Nigeria. The biggest market for Nigerian gas is the power sector,” said Bex Nwawudu, director, CBO Capital Partners.

He stated that there was need for gas pricing that would stimulate gas exploration and production in the country, adding that new ways of production should be encouraged.

Nysveen also noted that the challenges facing the Nigerian oil and gas industry include security, especially for foreigners, and the delay in the passage of the Petroleum Industry Bill (PIB), which, he said, had taken too long.

He said, “It is a reverse for the industry to have the uncertainties surrounding it now. It has been a problem that the activity level in the industry has been reduced, that means you are not really developing and exploring to replace the production. So reserves are going down.