Steady steps as Nigeria marches towards gas utilisation




With the Decade of Gas declared by the Minister of State for Petroleum Resources, Timipre Sylva, comes the need to begin to utilise Nigeria’s vast gas reserves in-country. In this report, BENJAMIN UMUTEME takes a look at the government’s effort to effectively make use of its vast under-tapped natural services.

As market volatility continues to plague oil coupled with the shift to renewables globally, it became clear that it was time that Nigeria moved with the time and made hay while the sun shone.

This was what led the Minister of State for Petroleum, Timipre Sylva, to come up with the ‘Decade of Gas’ slogan as the country strives to make use of its vast gas resource.

At the launch of the document for the ‘Decade of Gas,’ in March this year, President Muhammadu Buhari said the country was working to make the plan a reality. With the global demand for cleaner energy sources, the president said it was an opportunity for the country to diversify and uplift its economy.

According to him, Nigeria intends to seize the opportunity to exploit its gas resources for the good of the country. Despite the lack of focus on gas development in the past, President Buhari admitted that the country has benefitted immensely from the resource.

He said Nigeria Liquefied Natural Gas (NLNG), which contributes about one percent to GDP, has generated $114 billion in revenues over the years – $9 billion in taxes, $18 billion in dividends to the federal government and $15 billion in feed gas purchase.

With the world shifting focus to cleaner fuel, the managing director of Nigeria NLG, Mr. Tony Attah, stated at the recently concluded NIPS 2021, that utilising “Nigeria’s gas reserves will boost the economy.”

“Our Train 7 project alone will attract about$10 billion into the country with significant revenue generation for the government and our shareholders but also over 12,000 job opportunities for Nigerians,” he said.

Matching words with action

In order to be clear in its thoughts and actions, the federal government came up with the National Gas Expansion Programme (NGEP).

Failure over the years to harness the country’s resources through its conversion to make Compressed Natural Gas (CNG) the fuel of choice for transportation and LPG, the fuel of choice for domestic cooking, captive power and small industries.

The NGEP aims to move Nigeria from a crude oil export-based economy to an attractive gas-based industrial economy.

The policy will formulate strategies that will promote cost effective distribution of the various gas streams by marine, rail and road for achieving a most affordable, available, acceptable and accessible gas to Nigerians. Also, it is expected to fast-track the development of gas-based industries particularly petrochemical (fertiliser, methanol, etc) to support large industries such as agriculture, textile, and related industries; provide leverage for additional private sector investments in the domestic gas market; and boost employment across the country.

Projections for gas utilisation

It is expected that when the NGEP goes into full implementation, Nigeria will be able save $800 million as a result of reduction in flared gas; and at the same time ensuring that another N21 billion lost yearly to the Federation Account on potential carbon credits would be saved.

The NGEP, which is the brainchild of the Ministry of Petroleum Resources, will be funded by an intervention fund from the Central Bank of Nigeria (CBN) to the tune of N250 billion. The money will be distributed to Deposit Money Banks (DBMs), for on-lending to infrastructure borrowers-OMCs, Non-OMCs, and MPR affiliated operators.

According to the document, a total of 1,279,442 jobs would be created nationwide. Of that number, 767, 665 would be unskilled while 511,776 would be unskilled.

“Part of the strategy of the Programme will involve training of state indigenes to own Micro Stove Assembly, SMEs businesses, conversion of commercial business for their energy use, government workers to convert to LPG for household cooking and transportation.

“Achievement of Paris agreement; creation of an estimated 700,000 employment opportunities; economic and social growth; reduction of GHS emissions; reduction in FX utilisation on gasoline imports; human capacity development (750,000 women, youths trained on domestic and auto-gas cylinder handling and LPG sales,” the document stated.

Due to Nigeria’s current fuel choices, about 98,000 people die annually from indoor pollution from cooking gas.

Just as millions more contact various smoke and wood fumes related illnesses, and loss of cylinder manufacturing industries.

“Desertification at a rate of 670,000 hectares annually (UNSDF); Loss of 55.7% of primary forest between 2000 and 2016; and severe erosion in the South due to desertification,” the document stated further.

Train 7 launch

Speaking at the launch of NLNG Train7 in Bonny Islands, Rivers state, President Buhari stressed that the development of “Nigeria’s gas resources will transform the economy.”

He said: “I can only hope that the company continues to grow starting with this Train 7 project, but also positioning Nigeria to thrive through the energy transition.

“As we flag off the Train 7 project today, I look forward to the development and execution of more Gas Projects by the IOCs and indigenous operators, and more Trains from Nigeria LNG to harness the 203 trillion cubic feet of proven gas reserves thus opening the door of opportunities to further unlock our country’s huge gas reserves estimated at more than 600 trillion cubic feet.”

For the Minister of State Petroleum Resources, Chief Timipre Sylva, jobs created and the business opportunities realised since the inception of the LNG operations in Bonny Island are also remarkable.

He noted that the coming on stream of Train 7 “will enable the increase of LNG exports to markets that have growing demand for LNG as a preferred fuel for industrialisation and power generation; a similar template to utilise LNG will be replicated in Nigeria to further hasten our industrial development.”

Analysts estimated that the project would stimulate inflow of more than $10 billion Foreign Direct Investment to Nigeria creating 12,000 direct and over 40,000 indirect jobs stressing that the decision to begin the Train 7 project was to improve on domestic gas utilisation and investments in the sector in the country.

“The global energy demand is set to increase by more than 40% by year 2050 and we strongly believe that this project is timely as gas will continue to play a major role as the preferred energy of choice in the current and future energy mix,” Tony Attah, the NLNG managing director, said.

Beneficial

Speaking to this reporter on the sidelines of the Nigeria International Petroleum Summit (NIPS), which ended last week, the managing director, Clenik Petrotech Solutions, Clara Ikuku, said Nigeria has a lot to benefit from utilis ing its gas resources from generating more revenue to protecting the environment around the industry.

According to him, the deployment of green technology in Nigeria’s oil and gas industry would ensure that no gas is lost through flaring across oil fields in the country.

Ikuku, a geologist and reservoir engineer, noted that with a lot of banks withdrawing from oil sector financing, it was time the country fashioned a means of using its abundant reserves of gas.

She said, “The technology takes the gas, once the well has been completed, and streams it together with the water in the well to a pipeline. But before this, it has a whole lot of separators right at the well site, the separators will separate the constituents.

“You can sell the oil and then the gas which you can compress and re-inject if you want to manage your reservoir to maintain pressure in your reservoir. You can compress the gas and sell them or re-inject them for enhanced oil recovery.

“Then, because a lot of companies spend so much money on water disposal; they drill water disposal wells, they are looking for ways to manage the produced water. This case, it is a closed loop and so you don’t need to spend money on disposal. All you need to do is recycle the water and re-inject it into the well for pressure maintenance as well.

“It is a closed loop where nothing is wasted. The oil is separated right at your well and then sold, the gas is compressed, re-injected or sold and the water is recycled.”

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