Why West Africa needs to tap into unconventional natural gas revolution

Natural gas development in West African region currently is viewed as foundational element of economic growth and development.

A cursory look at West Africa region shows that natural gas aside from being a proven foreign revenues earner, it equally represents an avenue for employment, infrastructure development and the improvement of the broader social well-being.

Reports indicate that natural gas production in the region has been dominated by associated gas, and with fairly limited domestic markets for gas, much if relatively recently have seen a dedicated focus on capturing.

Gas Flaring Reduction initiative has had a major focus on the sub-region, with those efforts tied in with the export projects and with the development of the local infrastructure to support domestic gas use.

A publication by Ernst and Young observes that while Nigeria dominates the sub-region in terms of gas reserves, the country and its state-oil company, Nigerian National Petroleum Corporation (NNPC), have struggled to translate same into visible development of the country.

According to the report, “Tribal and ethnic violence has frequently curtailed production and threatened foreign investment, while the development of a consistent government energy policy has often been seemingly compromised by corruption and mismanagement.

NNPC is being reconstructed to transform it into a competitive international company and the government is pursuing an aggressive policy to increase local participation and returns from upstream investment, and in particular, increase and optimize domestic gas supply and usage.

It is not difficult to decipher that West African Gas Pipeline (WAGP) project running from Nigeria through Benin and Togo, and feeding into two power stations in Ghana have over the years continued to be plagued by cost-overruns and then by security concerns in Nigeria.

According to industry experts, the underlying theme of West Africa’s future gas development is the monetization of the underutilized resource base through for export, and more importantly, for domestic use.

Throughout the sub-region, two critical components of the gas development theme are downstream gas infrastructure development “integrated” gas development that could include power generation and/or industrial development) and increasing local content focus again, using gas development as a broader prime mover.

They are of the opinions that the sub-region’s largest producer, Nigeria, could with a major focus on the optimal development of domestic gas supplies, and on stronger local content requirements for all future gas development.

Many of these are, however, seen as very speculative, particularly many of the proposed Nigerian projects. Expansions of throughput on the West African Gas Pipeline are being discussed, but are largely being postponed due to growing Nigerian domestic gas requirements.

KELECHI EWUZIE