Kunle KALEJAYE

Experts in the oil and gas industry believe that Nigeria’s domestic market demand is growing at a projected annual rate of 25 per cent, which is one of the fastest demand growths in the world.

Speaking at the Third Nigerian Oil and Gas Technology Exhibition in Lagos, an engineer with the Nigerian Liquefied Natural Gas, NLNG’s Corporate Planning and Strategy Department, Mr. Ezekiel Adesina, said gas consumption in Nigeria will increase by seven fold at the end of 2015.

“The domestic demand for gas is growing due to the power sector reform and the government funded Gas Power Plant developments of over 10GW is driving domestic demand.

“Power sector demand growth is most aggressive. Over 20 plants are under construction or evaluation with potential to generate 16GW by 2015.

“The gas reserves requirement of this sector is also most significant relative to other sectors. The disproportionate demand has a significant impact on the overall commerciality of supply – as the price of gas to power significantly impacts on the total revenue of the gas suppliers.”

He maintained that about 3 billion cubic feet per day bcf/d is targeted for the power sector with existing PHCN plants being the cardinal base load consumers for the gas.

While gas plays a significant role in power generation, Adesina stated that there is the need for capacity expansion, utilizing mostly natural gas for greenfield Greenfield Combined Cycle Gas Turbines, CCGTs.

“There is need for additional implementation of Greenfield Combined Cycle Gas Turbines power plants. There are many thermal power plants currently operating in Nigeria that are single open cycle gas turbines.

“There is need for closure of selected existing single cycle Gas Turbines due to limited energy efficiency that can be attained by these plants.

“Transforming a single cycle plant to a combined cycle increases considerably the efficiency of the plant, making this type of investment a theoretically profitable than OCCT plants

He also explained that the Nigerian power sector have many open cycle gas turbine plants where existing installed power generating capacity totaled 5,890 MW in 2004, and more than 40 per cent were single cycle turbine engines, many of which are run as base load plants.

He added that “95 per cent of the existing single cycle gas turbines in Nigeria when converted to combined cycle gas turbines (CCGT) can generate additional power capacity of about 48 per cent above the current installed grid capacity without additional fuel combustion.

Adesina however said an estimated investment of about US$3billion would be required to fund these additional capacities from the existing plant.

According to him, “The export market is still growing – With train 6 now operational, NLNG’s capacity has reached 22MTPA with Train 7 on course – Other LNG plants (Olokola and Brass) are under evaluation for FID – The West African Gas Pipeline Project is continuing apace and there is evidence of increasing demand.”

He warned that gas exploration has not commenced, indicating that 15 Companies have been selected by Government as core investor.

“Government is the dominant gas resource owner but has limited operatorship. Most of the production is done by Major Oil Companies which although are about 60 % owned by NNPC are commercially driven.”