Nigeria: Under Investment, Others Threaten Govt's Gas Expansion Target - Kyari

8 December 2022

***Says, NNPC to deepen strategy with NCDMB, Investors on gas supply enhancement

Despite post Covid recovery in the oil and gas sector, indications have emerged that historical under-investment along with tightening monetary policies, high inflation, amongst others pose a major setback to the Federal Government gas expansion target.

This is coming even as the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, NNPC, Mele Kyari stated that the company will partner with the Nigerian Content Development Monitoring Board and all relevant domestic and international stakeholders to enhance the supply, delivery and utilization of gas in the country.

Speaking at the opening session of the 11th Practical Nigerian Content Forum, with the theme, "Deepening Nigerian Content Opportunities in the Decade of Gas," Kyari maintained that the NNPC Ltd will leverage on the provisions of policies/regulations, technological breakthroughs, innovative financial mechanisms and other key initiatives such as the National Gas Expansion Programme to make the energy sector resilient.

He said: "The global energy sector has, to a large extent, recovered from the impact of COVID-19 pandemic, only to be challenged by historical under-investment, tightening of monetary policies, high inflation, geopolitical tension and security issues, among others, resulting in high and volatile energy prices, and uneven and often low energy supply and demand

"Energy poverty and security which, hitherto, was a regional and under-developed countries concerns, has now become a global concern, with countries developing all sorts of approaches and innovations to remain energy resilient.

"International Agendas/Frameworks, including the UN's 2030 Agenda for Sustainable Development and successive Conference of Parties have continue to recognize the role of natural gas as a fuel of choice for sustainable development and for smooth energy transition to a low carbon future.

"This has created the much-needed opportunity to power the global economy in a sustainable manner using clean fuels to address global energy related challenges and create value for businesses and the society.

"In line with this and with over 200 TCF of proven gas reserves and a potential of growing to 600TCF, the Federal government declared 2021-2030 as the decade of gas towards a gas-powered economy with natural gas used as direct source of energy and its derivative, such as LPG and CNG, for clean cooking and driving

"Utilizing our upstream gas assets, and key gas pipeline infrastructure (ELPS, Oben - Ajaokuta/Geregu, the vast eastern network covering Alakiri-Obigbo, Ikot Abasi and Imo River, and the Gas Transmission Systems (GTS 1-5) to NLNG, NNPCL and its shareholders produce gas in excess of 6 Bscf/d and deliver to the domestic, regional (WAGP) and international gas/LNG markets, thus building in-country capacity and value to shareholders as well as earning foreign revenue.

"Today, the NNPC JV power plants (450 MW Okpai I and 650 MW Afam VI) continue to be key sources of power generation to the country and more power plant projects are being progressed.

"To further deepen gas utilization, we are exploiting more gas resources, including in the frontier basins, deploying /constructing more gas infrastructure & facilities e.g., 2 Bscfd OB3, 2.2 Bscfd AKK, Ibadan-Ilorin-Jebba Pipeline (EIIJ), Qua Iboe-Obigbo-OB3, Obigbo - Umuahia - Ajaokuta (OUA) pipelines and ANOH Gas Processing Plant, etc.,) and utilization points (AKK Power Plants, MEPP, petrochemical plants, , retail CNG refueling stations, etc. thus integrating gas supply sources with the demand centers across the country

"We are also complementing these gas penetration projects with several renewable energy and emission reduction projects to enhance the sustainability of the energy sector.

"Furthermore, we are embarking on LPG Penetration Scheme through the establishment of Micro Distribution Centers (MDCs) across the country to deepen LPG consumption for clean cooking (stop the detrimental in-door air pollution and deforestation) while creating opportunities for fabrication of LPG/CNG/LNG tanks, gas stoves, cylinders, etc.

"This is underpinned via enhanced LPG production NEPL's IGHF, NLNG, expansion of terminals and LPG trucking capacity."

Kyari said all these expansions and investments have created opportunities for Nigerian content, noting that the NNPC is encouraging organizations to identify the relevant areas in which they can participate in

"I am very pleased of the rapid growth of our local capacity, and we will continue to collaborate with NCDMB and other stakeholders to propel our local talents to achieve their full potential and compete favorably, domestic and internationally

"We would continue to deepen our Gas Cooperation strategy with all relevant domestic and international stakeholders to enhance gas supply, delivery and utilization while leveraging on the provisions of policies/regulations, technological breakthroughs (e.g., Carbon capture, utilization and storage-CCUS to lower GHG emissions), innovative financial mechanisms and other key initiatives such as the National Gas Expansion Programme to make the energy sector resilient

"It is my believe this would create value for our business and shareholders and make natural gas not only a transition fuel but a destination fuel of choice," he added.

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