-By Tubosun Afolayan
In 2021, the phrase “decade of gas” permeated the local and international business space. In the same year, price of Liquefied Petroleum Gas (LPG) suffered a 300% price increment. The LPG is the cooking gas, a direct domestic product. Nigeria Liquefied Natural Gas company, NLNG, via a press statement same year, admitted that the Nigeria market was unable to take up the 450000mt cooking gas supply they were on standby to provide. Seeing the gap, they left the economy a promissory note to enter the Nigeria domestic LNG supply space by July 2022.
Nigeria continually face an unabating energy crisis. Low power supply to stimulate industrial growth and the cut back of fossil-fuel investment due to the climate inspired energy transition. With the European Commission recently announcing the inclusion of Gas and Nuclear energy as a clean form of energy; the estimated recoverable country gas reserve of 139.4Tcf may be the lifeline to transit Nigeria out of looming energy poverty as earlier this week, NLNG also announced the supply of 100% LPG production to Nigeria.
The stage look set for the true start of the Decade of gas.
In NLNG’s press statement, it was mentioned that the gas company has developed a scheme to sustainably supply propane (cooking gas, LPG) to further deepen and achieve the country’s gas utilization agenda.
With NLNG, the Nigeria state has been relying heavily on the usage of natural gas to grow her economy, provide power to citizens with a long-term approach targeted at becoming the regional exporter of natural gas for the Sub-Saharan market. This is premised upon the completion of processing, storage, and distribution infrastructures, designed to support this domestic hub market. These factors and the lack of political and regulatory execution is what makes gas development, distribution, and utilization an ambitious project in Nigeria.
The NLNG with a current total capacity of 22 million tonnes per annum of liquefied natural gas, from its six train plants is one of top 10 suppliers of LNG in the world coming into the domestic market supply space may be what the country needs to advance. The domestic gas projects proposed to stimulate economic growth include Liquefied Petroleum Gases (LPG), Natural Gas Liquids (NGL), Gas to Liquids (GTL), Escravos Gas-to- Liquid (EGTL), the OSO NGL recovery, Brass River LNG, Olokola (also known as OK) LNG and the Tran- Saharan Gas Pipelines Project (TSGP).
The operational structure of this scheme will be a delight to read once shared, as a full domestic supply and utilization chain is what the Nigeria state needs to kick start the reduction of energy poverty and support her economic growth. Gas to power energy is a proven industrialisation booster.
Does the Nigeria state have the capacity to take this LPG considering the huge lack of transportation and distribution network required to transform? Does this cleaner fossil fuel from Gas-Power-Energy reach all nooks and crannies of the third world nation?
The country may be close to mitigating the challenges of gas utilization with the step the NLNG is taking to supply its 100% LPG into the country. This will grow the industrial and power generation sector, foster the nation growth, giving un-abating population growth and urbanization migration.
“PwC estimates that economic activities stimulated by the domestic utilisation of Nigeria’s recoverable proven gas reserves has the potential to generate a Gross Value Add (GVA) of US$ 18.3 billion yearly to the domestic economy through direct economic value addition of US$10.5 billion; indirect value addition of US$3,4 billion and induced value addition of US$4.4 billion. This is in comparison to generating annual export value of US$7 billion. Harnessing the country’s proven reserves for domestic utilisation can also support 6.5 million fulltime equivalent jobs yearly.”
While this appears good on paper, the gas supply chain of production – distribution – consumption and pricing remain threatened by several challenges among which are insecurity, vandalism, lack of newer infrastructures, limited distribution network and abysmal gap on safe domestic gas utilization. This is accompanied with unaffordability in a nation where 47.3% Nigerians, or 98 million people, live in multidimensional poverty.
If Nigeria is to actualize the progress of the decade of gas, government must prioritize funding, support institutional growth across the power sector, gas-based industries and commercial customers as well as heavily invest in automated gas infrastructures through Joint Industry Projects initiatives.
Tunbosun Afolayan is a Certified Petroleum Geologist and Energy Communications thought leader with almost two (2) decades experience in international Oil & Gas, Financial services & Solid Minerals Mining industries. She holds Post graduate degrees in Business Management, Entrepreneurship & Leadership, and Energy & Sustainability.
She is the current Publicity Secretary of the Nigerian Association of Petroleum Explorationists, Board member of the American Association of Petroleum Geologists, Division of Professional Affairs and Africa Region Imperial Barrel Award Coordinator.
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