Gas demand increase brighten Nigeria’s power sector prospects

Industry close watchers has projected that Nigeria power sector future look brighter on the back of the 7.2 billion standard cubic feet growth in domestic gas demand by 2025.

They are optimistic that with Natural gas expected to be the fastest-growing major fuel source, accounting for more than one quarter of all energy needs by 2025, Nigeria with an estimated 7 billion scf per day and 182 trillion scf of gas reserve, if well harness, the power sector would be the better for it.

They opine that future energy will be supported by more efficient energy-saving practices and technologies, increased use of less-carbon-intensive fuels such as natural gas, nuclear and renewable as well as the continued development of technology advances to develop new energy sources.

According to analysts the concretisation of Nigeria’s gas ambitions will however depend on the future development of a significant upstream and downstream gas infrastructure.

Joseph Eziegbo, chief operating officer, Falcon Corporation Limited observes that Nigeria gas reserves is believe to be higher than oil reserves, saying that as the second largest economy by GDP, Nigeria will get the full benefit of this if beyond eliminating flares, the government encourage investment in aggregating the non-Associated Gas (NAG) resources into usable forms for the overall benefit of the nation’s economy.

In the ranking of world proven natural gas reserves by country, Nigeria is the largest in Africa and the 7th largest globally. Nigeria currently produces an estimated 7 billion scf per day and account for an estimated 182 trillion scf of gas reserve.

Eziegbo was quoted to have said that Power and fuel costs traditionally constitute one of the highest single components of the overheads of the industrial sector worldwide.

According to him, “Our gas reserves are believed to be higher than our oil reserves, however, we will not get the full benefit of this if beyond eliminating flares, we do not invest in aggregating our non-Associated Gas (NAG) resources into usable forms for the overall benefit of the nation’s economy.

Analysts maintain that Energy used for power generation will continue to be the largest component of global demand adding that the increased energy demand would be driven by population growth, improved living standards and expanded urbanisation.

Nigeria with her huge natural gas reserve stands to benefits from increased capacity production, industry watchers insists saying that natural gas has the potential to engender rapid positive growth and enormous impact in the overall economy of our nation.

Dada Thomas, managing director, Frontier Oil Limited observes that the pricing structure and the nature of contracts remain a significant obstacle to the development of natural gas in Nigeria, saying that there is a need for a standardisation and harmonisation of the agreements.

Thomas opines the only incentive for indigenous companies willing to continue to invest in gas for domestic use is if government provides an enabling environment.

KELECHI EWUZIE