Analysts see 15,000 megawatts power increase with investment in gas gathering projects
Analysts in the energy sector are optimistic that Nigeria electricity generation output will receive a 15,000 megawatts increase once the federal government and its other joint venture partners increase its investment commitment to gas gathering projects which will further achieve zero gas flaring in the country.
There are indications that if the estimated 211.836 billion SCF of gas being flared are converted into power, Nigeria could be generating a sizeable amount of electricity for domestic use.
Wale Shonibare, managing director, Investment Banking, United Capital opines that a step into achieving this aspiration should start with the introduction of the domestic gas obligation which imposes an obligation on the oil companies to assign certain percentage of the gas being produced for domestic uses.
Shonibare sees a significant opportunity for the country to use her gas domestically for power purposes. “Looking at what is going on in the industry, the future is selling our gas domestically because the international prices are in decline”, he said.
Commenting on the prospects of the gas to power value chain during an energy financing forum, Shonibare posited that there are quite a number of weak links which has to do with policy position stressing that government needs to implement the right policy in order to attract investment financing to the sector.
He further hinged the success of financing opportunities opened in the gas and power sector to deregulation of Gas Prices, provision of long Term Patient Capital, Infrastructure Development, and migration from Dollar to Naira Financing.
At least $20bn would be needed to develop gas infrastructure in Nigeria over the next few years Rolake Akinkugbe, Head, Energy and Natural Resources, FBNQuest observed.
“The current situation in global oil and gas markets also necessitates urgency for Nigeria in focusing on create domestic markets for her gas, given the muted demand in our traditional exports markets including Asian emerging markets”. She pointed out.
Akinkugbe reiterated that Nigeria is extremely rich in Natural Gas reserves, and the main thrust appears to be the delivery of gas in sufficient volumes that would boost Nigeria’s power generation capacity.
“I think that level of production is quite achievable, but it’s going to require significant capital investment and a strong and water-tight regulatory framework to drive it.
“Of critical importance will be the funding requirement in the sector, with gas transporting via pipeline as well as gas processing facilities likely to be the most costly parts of the value chain”.
KELECHI EWUZIE