Demand for Nigeria’s gas locally and for export purposes has surpassed what can be supplied as Nigeria lags in using its available gas resources, lacks necessary infrastructure, security and enabling environment to boost supply.
This was discussed during a panel session at the ongoing 6th Nigeria International Energy Summit in Abuja, Dabotekenari Alabo, general manager, crude oil & gas commercial, TotalEnergies Nigeria said domestic consumption has grown to about 2bcf daily since the decade of gas project commenced, but in the same period, gas production has reduced to 7 billion cubic feet (bcf) of gas daily.
“We have challenges, for example there is no compression on NGIC so gas cannot get to the customers: If you do not get wells drilled or build facilities to process gas, there will be no gas on the end market,” he said.
Philip Mshelbila, managing director Nigeria LNG Limited said the company has been producing since 1999 and is now constructing its 7th train which is at 40 percent completion however its six trains in operation are almost half empty because there is no gas for them.
“Demand has soared to levels we have never seen before, prices last August were at records never seen before, this was the period we were having the lowest gas supply ever, so we could not be there to play in that market,” he said.
Mshelbila said while countries like Qatar, USA are locking themselves to 15-20 year contracts in the gas market, Nigeria is under force majeure meaning that the country cannot meet its obligation to existing customers much less sign up new customers or new contracts.
“We have got to fix the security situation immediately and it will unlock at least 30 percent out of the 40 percent gap we have in NLNG; we have huge reserves of gas in the deep water that have not been tapped into; for the medium to long term we need something above the PIA to address dry gas particularly off shore,” he said.
Ed Ubong, president of the Nigerian Gas Association (NGA), in his presentation said Nigeria is facing an urgent gas supply crisis which poses significant risk if not addressed promptly.
He said to actualise the decade of gas, implantation must commence immediately and must be achieved over a 12-18 months period, noting that 300 million scuf of gas can be extracted daily.
Ubong said eliminating the gas constraints to available capacity will have a significant impact on the economy and will drive a $4.7 billion growth in the power sector, $5 billion in the commercial sector, $4.4 billion in the gas based industry and $5.3 billion in exports.
“Unlocking the 3.1 bcf/d would create significant economic benefits including $14 billion in foreign direct investment, $12 billion in FG revenue from gas royalties and taxes, 2 million new jobs across the gas value chain,” he said.
Speaking on ways to secure Nigeria’s decade of gas, Ubong said there is a need to enable investments by supporting key infrastructure, improve investor confidence and also guarantee investors attractive returns.
Giving an update on the decade of gas project which is approaching its third year, Gabriel Aduda, Permanent Secretary, the Ministry of Petroleum Resources said demand for gas could grow to 22.5 bcfd by 2030 with domestic consumption accounting for 60 percent of total demand.
Read also: We cannot accept dispositions to defund gas projects – Osinbajo
Consequently, he said a set of targeted initiatives have been identified for implementation over the next 12-24 months in order to unlock critical gas supply required to meet the base case demand and also unlock infrastructure investments.
Some of the initiatives highlighted include the gas infrastructure development program which prioritizes the development of gas infrastructure such as pipelines, gas processing plants; creation of an enabling environment through the PIA passage and funding opportunities made available along the gas value chain.
Aduda urged people to take advantage of these opportunities, noting that the government wants more people to play in the gas space.
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