Stakeholders in the oil and gas sector have insisted on the need to get the best from Nigeria’s enormous gas resources, as the country embarks on $47.4 billion gas projects.
The country has recorded progress on key gas projects. The Brass Gas Hub is expected to be built for $3.5 billion while the Nigeria-Morocco gas pipeline will cost $25 billion. The Ajaokuta-Kaduna-Kano (AKK) pipeline is expected to cost $2.8 billion just as the Nigeria LNG
Seven will cost $6.6 billion to build while an additional $5 billion is expected to be spent on wells and pipelines.
Others are ANOH gas project, which is estimated at $1.4 billion, Dangote Fertilizer, which was estimated at $2.5 billion, and Obiafu-Obrikom-Oben Gas Pipeline also called the OB3 Pipeline that is estimated at $700 million.
Stakeholders, who converged virtually at the “Nigeria Gas/Energy Strategic Outlook for 2021 and Beyond and Review of Petroleum Industry Bill,’ which was organised by Energy & Corporate Africa, noted the need to address existing bottlenecks in the country’s gas space.
According to the Department of Petroleum Resources (DPR), Nigeria with 203tcf proven gas reserve and 600tcf unproven gas reserve has the largest reserve in Africa.
Sadly, the resource has not benefited the country, especially in meeting energy needs in the area of power generation, cooking, industrial use, and transportation.
Speaking at the programme, Chief Operating Officer, Gas and Power, the Nigerian National Petroleum Corporation (NNPC), Usman Yusuf, stressed the need to leverage the investment for sustainable future energy and technological revolution that would enhance gas uptake in existing and emerging gas markets.
Yusuf noted that the growth in the global energy market would continue as natural gas has a critical role to play in the industrial development of the continent.
“African has enough gas resources to enhance utilisation but requires adequate investment and favourable policies to provide the necessary infrastructure,” Yusuf said.
Yusuf stated that the COVID-19 pandemic provided thrust in global collaboration for energy market stabilisation.
Executive Director of Production at Seplat, Effy Okon, commended efforts being made to harness the country’s gas potential, noting that capital, under-investment, delayed delivery of planned gas infrastructure and poor pipeline network continue to affect the gain of gas resources.
Okon also noted that the lack of cost-reflective tariffs and huge debts in the power sector were affecting the gas market, adding that “lack of clear gas fiscal terms for production sharing contracts and the delay in the passage of PIB have reduced investors’ confidence in the sector.”
He also raised concern over foreign exchange challenges as investors receive revenue in naira against dollar-based investment.
“Non-bankable off-take agreement and lack of a properly-diversified consumer base for gas suppliers impact investor confidence. High loan interest rates, as well as delay in the joint venture funding, make it difficult to fund capital intensive, long-term gas projects,” he noted.