Nigeria to save $5 billion from gas development

Jul 01, 2016 12:00 AM

The Federal Government is expected to save $5 billion yearly if it pursues aggressive gas development in Nigeria, according to stakeholders.

Besides, Nigeria's gas reserves have increased from 186 trillion standard cubic feet (scuf) to 190 trillion Standard Cubic Feet (scuf), according to figures from the Department of Petroleum Recourses (DPR).

The Chief Executive Officer of Seplat Petroleum Development Company Plc, Austin Avuru, while speaking at the yearly general meeting of the Nigerian Gas Association (NGA), said that the development of the sector will lead to domestic energy security.

He noted that about 6.5 GW, representing 67 per cent of gas-fired power capacity is in western delta and reliant on ELPS for feedstock, saying that 45 per cent of feedstock is associated gas, transported mainly via Trans-Forcados.

Avoru stated: "Historically, gas discoveries have been incidental to oil exploration and development. Flare penalty of N10/Mscf has proved ineffective in dissuading gas flaring - Nigeria ranks second in flare volumes, accounting for 10 per cent of total global flares in 2011 following Russia. Power sector reforms, licensing of more IPPs and GMP have resulted in increased potential demand for domestic gas".

The DPR Director, Modecai Ladan, who made this disclosure at the yearly general meeting of Nigeria Gas Association (NGA) in Lagos on Wednesday, stated that updated statistics on the new national gas reserves indicated that the country now has 190 trillion deposit of natural gas and makes it the seventh in the world and the largest in Africa.

Represented by Assistant Director, Domestic Gas, DPR, Chioma Njoku, Ladan said that Nigeria has the potentials to become a global super power in Africa because it ranks third in gas production after Algeria and Egypt, despite being the largest in terms of gas reserves.

He argued that Nigeria can broaden its economy using gas. "It is a critical strategic consideration that must be embraced. We need to design framework that will focus on gas exploration with full support of industry stakeholders," he said.

The President of NGA, Bolaji Osunsanya, stated that Nigeria has experienced a transformational shift in the perceived role of natural gas from an energy source.

According to him, the decline in crude oil prices has coincided with a welcome surge in the use of natural gas for domestic and industrial use in developed and developing countries.

"We are aware that Nigeria's aspirations for the power sector particularly the significant amplification of the country's power generation capacity, would be largely based on the use of supply and delivery of natural gas.

"However, despite the abundance of natural gas, Nigeria's gas fired plants continue to operate below their installed capacity, crippled by the unavailability of gas due to persistent pipeline sabotage.

"This means we have to innovatively create a fuel diversification strategy which will enable about 1000MW of power generation to be supported by using the Liquefied Natural Gas (LNG). This process will require the liquefaction of about 240million cubic feet of natural gas per day. This large volume of gas can be compressed to about 0.4million cubic feet of LNG per day."

He however urged the government and operators alike to understand that the first step to take is the creation of a legal and regulatory framework which will eradicate persistent obstacles which have burdened the progress of the sector.

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