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Gas infrastructure development will spur economic growth – Seplat, NGA

The Managing Director of Seplat Petroleum Development Company Plc, Mr Austin Avuru and the President of the Nigerian Gas Association (NGA) and Deputy Managing Director of Falcon Corporation, Mrs Audrey Joe-Ezigbo, have emphasized the need for increased attention to the development of gas infrastructure in Nigeria and the deepening of domestic consumption and utilization of the commodity as that will spur economic development.

The spoke yesterday alongside other panelists at a media parley on ‘Natural Gas Roadmap for Nigeria’s Recovery, Growth and Prosperity’ organised by the Nigerian Gas Association via zoom.

The panelists x-rayed the imperative of natural gas as a critical enabler of the Nigerian economy especially in the post-COVID-19 pandemic era and the worsening oil price volatility. They identified how natural gas can bolster the economy and also the impediments to achieving the objectives.

According to Avuru, Africa’s biggest oil producer should begin to emphasize domestic gas consumption in addition to gas export as the way forward. While we earn revenue through liquefied natural gas (LNG) export, the more critical one is to encourage domestic gas consumption because of the multiplier effects.

Explaining how delays in gas infrastructure development had denied Nigeria the needed economic growth and including power supply deficits currently being suffered by the populace, Avuru said: “In almost 50 years of our industry up to 2010, domestic gas consumption was no more than 300million standard cubic feet per day (mmscfd).

“When the gas to power mantra started, we assumed a transition period of about 2012 to 2015 with a ramp up in power generation and distribution and the projection was that by 2015 to 2017, domestic gas consumption will go up from 300mscuf per day to about 2 billion standard cubic feet per day (bscfd).

“It did ramp up quite rapidly between 2013 and 2015 from 300 mscfd to 900mscfd. In the last five years since 2015, that consumption figure has almost remained flat at about 900mscfd to 1.1bscfd.

“The reason is that for this five years period, power generation has remained flat at about 4,000 megawatts (Mw), when we are supposed to be at about 15,000Mw.

“In terms of sending gas for infrastructure and big industries, some of the constraints have been transmission infrastructure. A combination of delay in finishing gas transmission infrastructure and the fact that power generation has not gone up at all in the last five years means that since we ramped up domestic gas consumption rapidly within three years to about one bscfd, we have stayed that way for the past five years without further increase.”

He explained how players in the Nigerian gas sector could have optimally leveraged the West African Gas Pipeline project, Obiafu, Obrikom & Oben (OB3) project and Escravous-Lagos Pipeline System (ELPS) expansion project for economic development and job creation but for dearth of gas transmission infrastructure, the gas sector remains where it is today. For instance, the OB3 pipeline project was originally planned to commence operation in 2017, and it is yet to be completed in 2020 even as the ELPS expansion ought to have been ready since four years ago. Currently on board is the AKK and ANOH projects, which are major gas projects.

For Mrs Joe-Ezigbo, Nigeria’s proven gas reserves figure, according to the Department of Petroleum Resources, stands at 203.16 trillion standard cubic feet (tscf), which is a marginal increase over the previous data of January 2019’s 202tscf. DPR, she said, is setting targets of gas reserves of up to 210tscf by 2025 and 220tscf by 2030. These are interesting numbers in themselves and we are glad to see the increases in our reserves numbers. There is still the questions as to whether these are true representation of Nigeria’s gas potentials. Nigeria does represent quite an interesting paradox. We are major resource holders, major exporter of gas, at the same time we struggle on thedomestic front with deindustrialization, with unmet domestic gas demand and insufficiency in gas supply to the power sector for power generation.

She said: “Over the past few years as economy faced several headwinds both on the macro and micro levels, there has been clamour for diversification of the economy to ensure other sector are equally vibrant, fully functional and also contribute their optimal best to government revenues.

“Gas as we know, is a resource that has the potential to be key driver of industrialization, rapid economic advancement in Nigeria and we see this in several countries that have successfully leveraged their gas resource as feedstock to industry to power their economy. Gas is a sector that provides large scale employment. For a country like Nigeria that has the kind of unemployment statistics that we do, we significantly need to ramp up utilization of gas to create value.

“We know that in using gas for the economy, we are able to create direct employment through the exploration activities, in production, transportation and distribution of natural gas. We are able to provide indirect employment through the industries, the manufacturing sectors and value chain support system that feeds into the natural gas industry.

“There is induced employment because as the welfare of those employed in the industry grows, they are able to inject that income in to the economy and creating a further cyclical demand for goods and services that are out of the gas industry.

“Over the last few years, we have seen a ramp up in domestic gas utilization but we agreed that export gas still dominate the profile of gas in Nigeria. Coming out of what has happened with the pandemic, one of the key things that we have realized as a country is that there is a need to focus on in-country utilization. We need to create the channel through which we utilize our own gas in-country to create capacity, to build technology and ensure industrialization and certainly it will provide the power that we need.

“Whether we talk about driving industrialization, energy sufficiency, agricultural and food sufficiency and accelerating non-oil income generation, there is need to leverage gas resources to create jobs.”

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