Reps C'ttee on Gas seeks more funding for NPDC
Reps C’ttee on Gas seeks more funding for NPDC

By Obas Esiedesa

Nigeria’s gas production rose marginally by 0.3 per cent quarter-on-quarter, QoQ,  in the first quarter of 2021, Q1’21, to 639.16 Billion Cubic Feet, bcf, compared to 637.24 bcf produced in the fourth quarter of 2020, latest data from the Nigerian National Petroleum Corporation, NNPC, has shown.

But this is a significant improvement as the Corporation’s Financial and Operations Report for the month of April, 2021, indicated that gas production had fallen year-on-year, YoY, by 9.95 per cent when compared to the 709.82bcf produced in the first quarter of 2020, Q1’20.

A month-on-month, MoM, analysis of the production figures in the Q1’21 shows that gas production for March, 2021 was 210.55bcf, a 2.02 per cent rise compared to the 206.37bcf produced in February, 2021.

February gas production figure was however lower by 7.14 percent compared to the 222.24bcf produced in January, 2021.

Nigeria as a gas province

Nigeria, according to the Department of Petroleum Resources, DPR, has over 206.53 trillion cubic feet (TCF) of proven gas reserve, making her one of the top six countries in the world with largest gas reserves.

Known globally for its crude oil export, Nigeria’s gas reserves have been left largely untapped.

In 2019, according to Oil and Gas Audit Report by the Nigeria Extractive Industries Transparency Initiative, NEITI, Nigeria earned $1.476 billion from its gas resources with Nigeria Liquefied Natural Gas Limited, NLNG, feedstock accounting for 64 per cent of the sales.

Decade of gas 2021- 2030

In order to make maximum use of its gas resources, the Federal Government at the end of March this year declared 2021 to 2030 as Nigeria’s decade of gas. It came after 2020 was declared as year of gas by the government.

The ambitious plan, according to President Muhammadu Buhari is to have Nigeria’s economy entirely powered by gas by the year 2030.

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He said gas has the potential to diversify and uplift the economy, given the country’s potential of about 600trillion cubic feet of gas and the rising global demand for cleaner energy sources.

He explained that this has offered Nigeria an opportunity to exploit its gas resources for the good of the country.

“We intend to seize this opportunity”, he stressed.

He explained that before the declaration of Year 2020 as “The Year of Gas, this Administration had shown commitment to the development of Nigeria’s vast gas resources and strengthening of the gas value chain by reviewing and gazetting policies and regulations to enhance operations in the sector as encapsulated in the National Gas Policy of 2017.

“Our major objective for the gas sector is to transform Nigeria into an industrialized nation with gas playing a major role and we demonstrated this through enhanced accelerated gas revolution”.

Despite the lack of focus on gas development in the past, he said Nigeria has benefited immensely from the resource.

Also speaking at the event, the Minister of State Petroleum Resources, Chief Timipre Sylva said Nigeria’s enormous gas resource would enable it tackle the energy poverty in the country, to generate electricity and power its industries.

Sylva pointed at the deal to build the $10 billion train-7 by the shareholders of NLNG, despite the disruption that happened last year, as a pointer to the potentials available in the sector.

He urged the operators to show faith and confidence in the Nigerian environment, saying the government has bent-over backward to accommodate their demands.

He expressed the commitment of the Buhari’s administration to get a new law for the industry through the Petroleum Industry Bill, PIB, saying the law would be passed soon.

On his part, the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mallam Mele Kyari pointed out that even though Nigeria was belatedly shifting its focus on gas, a lot could still be done.

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Kyari observed that oil majors have not in the past treated the domestic market as a business, which led to undersupplying of the product to domestic users.

He said a lot has been done to boost the development of the resource in the past few years.

“Nigeria under the visionary leadership of President Muhammadu Buhari has committed huge resources to ensure that domestic gas infrastructure reach every corner of our country, to deepen Natural gas utilization, spur investment in power and gas-based industries, grow the economy and generate employment for millions of our young people”.

Alternative energy sources

Faced with rising cost of petrol subsidy, the Federal Government moved to promote the Compressed Natural Gas, CNG, AutoGas and Liquefied Petroleum Gas, LPG, as alternative energy sources of choice for Nigerians.

The plan was backed by a N250 billion gas expansion fund by the Central Bank of Nigeria, CBN. It amongst other things aims to move LPG use in the country from the current five percent to about 90 percent in 10 years.

Experts’ views

Speaking at the weekend on the plan of government to boost domestic gas consumption, the Permanent Secretary, Federal Ministry of Petroleum Resources, Mr Bitrus Nabasu explained that besides increasing revenue from the sector, the government expects the sector to contribute more the national economy.

According to him, “As part of the Federal Government of Nigeria’s strategy to move Nigeria from crude oil export-based economy to a gas-based industrial economy, the Ministry of Petroleum Resources has commenced the implementation of carefully conceived initiatives to foster efficiency and attract investments along the oil and gas value chain as embedded in federal government policy of 2017 and indeed aligning with the Ministry’s 2019-2023 nine priority project deliverables.

“It is expected that this will create clean alternative sources of domestic energy choices for Nigerians such as CNG and LPG to stimulate economic growth and investment in the gas value chain”, he added.

Also speaking to Energy Vanguard in a telephone interview, the Director, Centre for Petroleum, Energy Economics and Law, University of Ibadan, Prof. Adeola Adenikinju, said he expects gas production and gas market to grow following the enactment of the Petroleum Industry Act, PIA.

Adenikinju explained that the new petroleum law has brought Nigeria closer to efficiently managing the industry with attractive fiscal regimes.

According to him, the full “implementation of the Act especially with NNPC becoming commercial, the sector will thrive because there will be more investments and the sector will come alive.

“The manufacturing sector will come in and people will start companies that will be gas depended”.

Vanguard News Nigeria

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