Vanguard (Lagos)

28 May 2014

Nigeria: FG to Build Longest Gas Pipeline - Alison-Madueke

ABUJA--As part of efforts at ensuring steady supply of gas to meet up with growing market demand of the product, the Federal Government is planning to construct the longest pipeline in the country from Calabar through Ajaokuta to Kano State.

This was disclosed by the Minister of Petroleum Resources, Mrs Diezani AlisonMadueke while delivering a paper titled: "Encouraging Investment in Gas Production, Supply and Consumption" at a three-day National Conference on Gas Resources organized by the Senate Committee on Gas Resources in Abuja.

"By the end of the year, we will be commencing, via Public Private Partnership (PPP) scheme, the nation's longest pipeline from Calabar via Ajaokuta to Kano State," AlisonMadueke stated.

Represented by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Engr. Andrew Yakubu, the Minister said that at present the Federal Government was constructing the strategic EastWest pipeline while the Lagos end segment of the Escravos to Lagos Pipelines System (ELPS) is nearing completion.

She explained that almost 500km of new gas pipelines have been completed and commissioned, including the doubling of the capacity of the ELPS between Escravos and Oben and the extension from Oben to Geregu and River Imo to Alaoji respectively.

The Minister said that by the end of 2018, the backbone pipeline infrastructure for gas would have been delivered, concluding an initial phase of over 2500km of gas pipeline infrastructure development.

She said that government was strategizing to leverage on the full potential of gas to achieve massive impact on the economy and the national Gross Domestic Product (GDP).

"We are focused on jumpstarting gas supply to enable usage in gas to power, gas based industrialization, compressed natural gas for transportation and commercial usage, cooking gas for domestic usage and regional pipeline for gas export," the Minister stated.

She said that for government to support the aggressive short term demand growth in the power sector, a domestic gas supply obligation regulation which mandates a certain amount of gas supply for the domestic market pending the full maturation of the market was introduced.

She expressed confidence that the market will ultimately drive itself for supply growth, adding that the long run expectation is for less dependence on supply via obligation.

In order to boost investor confidence in natural gas in the country, she said government has reviewed the contractual framework for gas through the development of world-class standardized gas supply agreements in addition to Network Code which governs the flow of gas across the nation's pipeline network and provides rules for open access.

She said that the use of natural gas instead of petrol has translated into significant savings for over 4000 taxi drivers in Benin who are already using this alternative energy source.

In the same vein, the Minister said that the federal government's efforts at eliminating gas flaring is making significant impact as flare out rate dropped from 25% to 11% of production.

"Many of the International Oil Companies (IOCs) are fast approaching full flare out as the gas obligation and infrastructure growth have all combined to enable utilization of hitherto flared gas," Madueke stated.

She finally called on all stakeholders to put more effort towards full market liberalization and address the very urgent challenge of increasing supply to the power sector.

Speaking in similar vein, the Group Managing Director of NNPC, Engr. Andrew Yakubu, while presenting a paper titled: "Nigeria's Gas Resources, Current and Future Expectations", at the Conference put the country's current gas production at about 8.5 billion cubic feet per day (bcf/d).

He explained that of the total production, 3.5bcf/d (41%) is exported, 2.3 bcf/d (28%) is consumed domestically for power and industries, 1.2 bcf/d (15%) is used in the upstream for gas reinjection and balance of 0.8bcf/d (10 per cent) is flared.

In her welcome address, the Chairman Senate Committee on Gas Resources, Senator Nkechi Nwaogu, said that Nigeria with per capita consumption of natural gas put at about 1.06kg, ranks lowest in Africa with only 5 per cent of her citizens having access to domestic gas.

She explained that the aim of the conference was to look at ways of filling the huge gap between gas production and utilization in the country as well as reducing routine gas flaring for the benefit of the nation and its citizens.

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