By Ndubuisi Micheal Obineme
The Ministry of Petroleum Resources under the superintendency of the Honorable Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, clinched the prestigious award of ‘Gas Monetization Development Award of the Year’ premised on the Federal Government ‘Decade of Gas’ Development Initiative in Nigeria.
The Ministry of Petroleum Resources received the award at the 2022 African Energy Week Award Night which officially kicked off yesterday Tuesday, 18th October 2022 in Cape Town, South Africa Under the theme ‘Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment’.
The award was received on behalf of the Honorable Minister by his acting chief of staff/Governor of OPEC for Nigeria, and Special Adviser, International Energy Relations -Dr Adedapo Odulaja. He was accompanied on the stage by the Technical Adviser (TA) on Gas Business & Policy Implementation To The Honorable Minister of State, Petroleum Resources – Dr. Justice O. Derefaka alongside the Executive Secretary, Nigerian Content Development and Monitoring Board, (NCDMB) – Engr. Simbi Wabote, NNPC Group Executive Director (GED) Downstream, Adetunji Adeyemi among others.
Recall last year (29th March, 2021), President Muhammadu Buhari, alongside Vice President Yemi Osinbajo and the Minister of State for Petroleum Resources, H.E. Timipre Sylva featured in the “Decade of Gas” conference and high-level networking session in Abuja.
Nigeria’s ‘Decade of Gas’ initiative succeeds the 2020 ‘Year of Gas’ declaration, which played a forerunner to the decade-long ambition and saw the government unveil a range of projects, including the 614kms-long Ajaokuta-Kaduna-Kano (AKK) pipeline at a cost of $2.8 billion to connect the eastern, western, and northern regions of the country, and the construction of $10 billion LNG Train 7. Policy changes, such as gas flare commercialisation and the codification of the Nigerian Gas Transportation Network, are in addition to these projects.
The event, with the theme, “Towards a Gas-powered Economy by 2030” which also served as the formal launch of the Federal Government’s initiative to declare January 1, 2021 to December 31, 2030 as “the Decade of Gas Development for Nigeria”, a period the government aspires to industrialise the country using gas as an enabler. Following this declaration, the government and operators have demonstrated a new resolve to do things differently.
“To actualise the dream of transforming Nigeria with its massive natural gas resources requires collaboration of government with the necessary stakeholders; the international oil companies, the indigenous oil companies and financial companies … to fully utilise our gas resources to uplift our economy,” said President Buhari at the launch and declaration of the FG’s decade of gas initiative , highlighting the importance of gas industry for significant revenue generation, in addition to over tens of thousands of job opportunities for Nigerians up to 2030.
Last year at the launch of the decade of gas, The Honorable Minister of State for Petroleum Resources HE Timpire Sylva, said: “It is no longer acceptable that despite the country’s vast natural gas resources the gap between electricity supply and demand is huge. We must deal with the energy poverty in this country, we must find a way to unlock the natural gas potential of this great nation and drag over 120 million people out of energy poverty.”
Gas is a source of energy, gas is transport in vehicles, petrochemical in feedstock, power in manufacturing and industry, food through fertiliser, and now it is the central plank in the world’s seventh most populous nation and a pillar member of the Gas Exporting Countries Forum (GECF), Nigeria, as it transforms its energy landscape to run entirely on natural gas.
Nigeria is blessed with abundant reserves of both associated and non-associated gas, estimated to be in excess of over 208 trillion (standard) cubic feet (tcf). However, geologists believe that there is a lot more gas to be found in Nigeria, potentially up to 600 tcf, if oil and gas companies deliberately explore for gas, as opposed to finding it accidentally while in search of oil.
The Nigerian gas potentials are 10 times the potentials of oil. Gas as a fuel source creates enormous opportunities and products that can be deployed which include gas as an energy source, and gas as a feedstock (Petrochemical). It can also be used for the production of high-value fuels and chemicals such as methanol, ethanol, gasoline, and diesel oxygenated fuel blend.
The Nigerian government does not only see gas as a revenue-generating resource, it also sees it as a transition fuel amid the global push toward cleaner and greener energy sources. Over the years, the government has been formulating various policies aimed at deepening domestic gas utilization and increasing the country’s export capacity.
According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the country’s proven reserves as of January 1, 2022, is 209.5 Trillion Cubic Feet (TCF), the largest in Sub-Saharan Africa and the top 10 in the world. Nigeria also has over 600 TCF of unproven gas reserves.
Proving the 600 tcf reserves will move Nigeria to fourth position in the world from currently the ninth largest natural gas reserve-holder in the world. The country is the largest oil and gas producer in Africa and the sixth largest supplier globally of liquefied natural gas (LNG) in the world. Nigeria is a member of both the Gas Exporting Countries Forum (GECF) and OPEC.
As the decade of gas initiative looks promising and succinct, many now believe that Nigeria’s largely untapped, natural gas resources could provide the means for the country to fund its way through the global energy transition. And one of the country’s major efforts is the Ajaokuta–Kaduna–Kano (AKK) 614km-long natural gas pipeline set for completion in 2023. It will feature a diameter of 40in and is expected to transport 3,500 million metric standard cubic feet per day (Mmscfd) of dehydrated wet gas from several gas gathering projects located in southern Nigeria.
The AKK project will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria. It also aims to create a steady and guaranteed gas supply network between the northern and southern parts of Nigeria by utilising the country’s widely available gas resources.
In addition, the development is expected to reduce the large volume of gas flared annually in Nigeria, as well as the subsequent environmental impact. The pipeline is slated to originate from Ajaokuta and pass through Abuja and Kaduna, before ending at a terminal gas station in Kano.
The project will be executed in three phases, with phase one covering the construction of a 200km-long segment between Ajaokuta and Abuja Terminal Gas Station at a cost of $855m. Phase two will comprise a 193km-long section to be built between Abuja and Kaduna at a cost of approximately $835m. Phase three will involve the construction of a 221km-long section between the Kaduna terminal gas station (TGS) and Kano TGS. This section will cost an estimated $1.2bn to complete.
Other infrastructure planned for the development includes various associated valve stations, as well as intermediate and terminal facilities. The natural gas pipeline is expected to require the laying of approximately 51,200 steel line 40in-diameter pipes featuring a total combined weight of 240,768t. Furthermore, the project will utilise 24in-diameter steel line pipes for spur lines, as well as 40in-diameter line break valves and future tie-in valves.
The AKK project is spearheaded by the government and funded by China’s Belt and Road Initiative, the government hopes it will connect the country’s gas supply to other planned trans-regional and intercontinental pipelines, such as the Trans-Saharan Gas Pipeline, in order to open up access to Europe.
Additionally, one of Nigeria’s current biggest gas deal the The Nigeria LNG Train 7 project has a 5-year completion schedule already clearly mapped out. The project will provide direct employment to 12,000 people and indirect employment to over 40,000 Nigerians. Local vendors and contractors would be taken to task to provide the materials required.
Recall also that in the Decade of Gas work plan, about 10 projects has been identified to address the supply side of natural gas and power challenge. Decade of Gas work plan has also looked at the demand side of natural gas in Nigeria both domestic and export, the supply side, the infrastructure side, as well as the commercial or economic framework needed to address all the problems and had equally outlined very specific things needed to be done to address them.