Ibe Kachikwu:NNPC MD

The Federal Government on Wednesday said that the country’s gas reserves had increased from 186trillion standard cubic feet (scuf) to 190 trillion scuf.

This was made known by the Director of Department of Petroleum Resources (DPR), Mr Modecai Ladan, at the Annual General Meeting (AGM) of Nigeria Gas Association (NGA) in Lagos.

Ladan was represented by the Assistant Director, Domestic Gas, DPR, Mrs Chioma Njoku.

The director said that an updated statistics on the new national gas reserves indicated that the country now had 190 trillion scuf deposit of natural gas.

This had made the country the seventh producer of natural gas in the world and the largest in Africa.

Ladan assured stakeholders that Nigeria had the potential to become a global super power in Africa because it ranked third in gas production after Algeria and Egypt, in spite being the largest in terms of gas reserves.

He argued that Nigeria can broaden its economy using gas.

“It is a critical strategic consideration that must be embraced. We need to design framework that will focus on gas exploration with full support of industry stakeholders,’’ he said.

The Senior Technical Adviser, Upstream and Gas, to the Minister of State for Petroleum Resources, Mr Gbite Adeniji said that there was need to consider opening up gas supply from the inland basins.

“We can’t rely on the Niger Delta alone. There is a lot of gas in the inland basins. It is time we considered developing gas infrastructure to explore gas in the offshore.’’

He said that about 11 of the nation’s power plants had become dormant due to gas constraints.

“An alternative system from the offshore will help. In the inland basins, there are gas reserves that could lend themselves to some small power plants.

“We should think about flexibility. We are working hard on gas terms for PSC concessions.

“We should consider gas development a matter of strategic importance. Therefore, we need to develop an appropriate legal and regulatory framework.

“We now have to open a big pathway for new players in the gas sector.

“The fiscal regime has proven to be the most effective drive of gas development in the country. But most of the projects we have seen are export projects,’’ he said.

Adeniji said that the fiscal strategy should focus on prioritising exploration and production activities of gas with proper incentive structure that was globally competitive.

“We need pricing reform. On the supply side, there is a lot of potential. We need market-based pricing for wholesale gas supply.

“We must have transitional pricing and then we open it up for market-led pricing. I am not in favour of willing buyer, willing seller pricing right now. The time is not ripe,” he said.

In his opening remarks, Bolaji Osunsanya,President of Nigeria Gas Association, said that Nigeria had experienced a transformational shift in the perceived role of natural gas from an energy source.

“Decline in crude oil prices has coincided with a welcome surge in the use of natural gas for domestic and industrial use in developed and developing countries.

“We are aware that Nigeria’s aspirations for the power sector, particularly the significant amplification of the country’s power generation capacity, would be largely based on the use of supply and delivery of natural gas.

“However, in spite the abundance of natural gas, Nigeria’s gas fired plants continue to operate below their installed capacity, crippled by the unavailability of gas due to persistent pipeline sabotage.

“This means we have to innovatively create a fuel diversification strategy which will enable about 1000MW of power generation to be supported by using the Liquefied Natural Gas (LNG).

“This process will require the liquefaction of about 240 million cubic feet of natural gas per day.

“This large volume of gas can be compressed to about 0.4 million cubic feet of LNG per day,” he said.

He urged the government and operators to understand the first step to take in the creation of a legal and regulatory framework which would eradicate persistent obstacles which have burdened the progress of the sector. (NAN)