Time to stretch the frontiers of gas potential in Nigeria

Nigeria, despite having a high share of proven gas reserves, continues to experience a case of underfunding in the gas sector.

Figures show that Nigeria has the ninth largest gas reserves in the world, estimated at 182 trillion cubic feet, which represents the significant majority of natural gas when compared globally.

Statistics also indicate that Nigeria remains very strong in terms of gas production as despite the upturn in global crude oil price which is gradually picking up.

The country currently produces 7 billion scf per day, 43 percent of production is either re-injected or flared without any commercial benefit.

Nigeria is endowed with abundant gas resources and the sector holds huge potentials for unprecedented growth, industry close watchers have opined.

They however observe that the existing legal and regulatory framework needs provide robust technical and commercial framework for gas to achieve the desired commercial potential.

Those who know in the gas sector observe that a lack of investment financing is one of the major barriers to expanding gas capacity.

According to them, “Increasing domestic production over the short/medium term would require high capital investment from explorers, which looks unlikely given the current economic volatility in the upstream industry.

As one of the largest natural gas province in the world, Industry close observers opine that the quantum value gain from the combine price increase and the demand from industrial sector will outstrip LNG which will remain constrained by new supplies into the global market from unconvential gas.

“The solution to this is simple and not in any way complicated, a local gas market without government interference in pricing will definitely be attractive to investors”, they said.

Industry analysts further maintain that as an enabler, the gas sector framework will entrench transparency, efficiency, fairness and non-discriminatory access to gas transportation networks.

They opine that the Federal government requires the right strategy to develop gas reserves in country and fashion out how to transport gas for use in power projects and industrial processes in Nigeria.

“Natural gas is a cleaner, less expensive fuel compared to liquid fuels and offers significant economic and environmental benefits for the country”. They added.

Ibe Kachikwu, minister of state for petroleum resources at different gas engagement events said that government policy interventions aspires to among other things; move the economy to become a predominantly gas operated; diversify the gas supply options within Nigeria to ensure security of supply; extend gas penetration in the domestic market in order to facilitate the growth of the electric power, agricultural and industrial sectors.

According to him, federal government intervention would gain a presence for Nigerian gas in international markets; operate a gas industry with a clear division of roles between private and public sectors; end and commercialise gas flaring and address environmental issues.

Industry closer watchers in the gas industry are optimistic that this renewed government efforts to ensure the creation of a market drive gas industry to minimise the environmental footprint of gas exploration and production is a welcome development.

They observed that with the right measures, Nigeria stand to gain from a diversified gas supply options within Nigeria, to ensure security of supply adding that this would further extend gas penetration in the domestic market in order to facilitate the growth of the electric power, agricultural, and industrial sectors.

KELECHI EWUZIE