Low local demand, weak infrastructure slow Nigeria’s gas utilisation

Concerns over low local demand, weak infrastructure, unattractive gas pricing couple with government lethargy are major hurdles standing in the way of Nigeria realising her gas utilisation prospect, according to BusinessDay finding.
According to Energy Information Administration (EIA), Nigeria is the ninth largest holder of proved natural gas reserves in the world, holding about 182 trillion cubic feet of proved natural gas reserves, accounting for 82 percent of the total in sub-Saharan Africa.
Nigeria also is the largest gas producing country in Africa. Despite this huge advantage, the country falls short in its ability to effectively utilise her gas reserves to the benefits of her citizens.
Industry close watchers observe that the inability of the managers of the economy to strategically utilise and commercialise these abundant gas reserves have given rise to loss of revenue, environmental pollution and degradation.
Dolapo Oni, head, Energy Research, Ecobank Development Company (EDC), observes that absence of necessary policies and fiscal incentives to encourage the development of the industry represent factors hampering the effective utilisation and commercialisation of gas in Nigeria, as Africa’s largest economy by GDP.
Oni is of the view that despite the huge gas reserve in Nigeria’s possession, not much has been accomplished with respect to the effective exploitation and utilisation of this abundant natural gas reserve of which some of this gas reserves are termed ‘stranded’ whose volume and location are often considered as non-commercial and difficult to exploit.
Wumi Iledare, director of Emerald Energy Institute, University of Port Harcourt, Rivers State, disclosed that the issue of the absence of necessary policies and fiscal incentives to encourage the development of the industry, especially in the downstream sector; low liquid hydrocarbon fuel prices which makes industrial and commercial enterprises reluctant to invest funds necessary to convert their energy source to gas.
According to Iledare, “There has been little incentive for energy companies to explore specifically for gas due to a lack of fiscal incentives and the high set-up costs and time needed to develop liquefied natural gas (LNG) facilities in order to export gas.
“If the government is able to make the investment environment more attractive, the country has massive prospects. “Indeed, industry experts have said that Nigeria’s gas reserves could potentially be high if deliberate steps are taken to explore for gas.
“To stimulate investment and grow the gas industry ensuring that it makes meaningful contribution to economic development, Analysts said, “Local markets must be created for gas utilisation, while gas prices must be set at commercial levels to stimulate development of gas facilities.”
 

KELECHI EWUZIE