‘HOW NIGERIA CAN SAVE $10B YEARLY FROM FLARED GAS’
‘HOW NIGERIA CAN SAVE $10B YEARLY FROM FLARED GAS’
The Programme
Manager, National Gas Flare Commercialisation Programme (NGFCP), Federal
Ministry of Petroleum Resources, Justice Derefaka has disclosed that Nigeria
loses approximately $10 billion of revenue through gas flaring, due to its
inability to capture and commercialise flared gas in the country.
He further stated
that if flared gas is properly exploited, it has the potential to create
300,000 jobs, produce 600,000 MT of LPG per year and generate 2.5 GW of power
from new and existing IPPs, as approximately 700mmscf/d is flared at 178 flare
sites in Nigeria.
Speaking at the
Nigerian Norwegian Chamber of Commerce (NNCC) Q1 2018 Business Roundtable
Seminar held recently in Lagos, on “The Monetization of Gas: Perspectives and
Opportunities in the Nigerian Gas Industry”, Derefaka revealed that Nigeria
currently utilises almost 700mmscf/d of gas for power production, which could
be doubled by capturing and commercializing flared gas, adding that about $3.5
billion worth of inward investments is required to achieve the country’s flare
gas commercialization targets by 2020.
Derefaka stated that
a ‘Flare Gas (Prevention of Waste and Pollution) Regulation 2018’ is being
finalized and will be issued shortly to underpin the implementation of the
NGFCP, as gas flare reduction is a priority in the suite of Federal Government
programs for improving the environmental, health, social, economic and security
problems in the Niger Delta region.
He stressed that the
solution must not only benefit Niger Delta communities and positively
contribute to the Nigerian economy, it must also present a bankable market
opportunity for investors and lenders alike.
In a similar vein, Ian Brown-Peterside, the Managing Director, Midstream, Seven Energy, stressed that the productive utilization of the nation’s gas reserves is critical to Nigeria’s future; “A robust and viable Gas-to-Power sector in Nigeria is critical to Nigeria’s future economic growth, constant power supply will lead to growth across all sectors” he said.
In a similar vein, Ian Brown-Peterside, the Managing Director, Midstream, Seven Energy, stressed that the productive utilization of the nation’s gas reserves is critical to Nigeria’s future; “A robust and viable Gas-to-Power sector in Nigeria is critical to Nigeria’s future economic growth, constant power supply will lead to growth across all sectors” he said.
He further stressed
that lack of capacity in power generation, compared to other countries, makes
it very difficult to attract new investment and retain existing investment in
the broader economy, noting that just 25 per cent of Nigeria’s circa 12,000
mega watt of installed generation capacity reaches the end user.
He added that current
electricity consumption of 144kwh per capita in Nigeria compared to the global
average of 3104kwh is alarming, and wholly inadequate to support the economic
development goals of the country.
According to
Brown-Peterside, gas policy is not always clear and consistent; further sector
challenges include commitment to payment terms in the gas to power business,
noting that critical factors like co-operation and alignment between
stakeholders, proper risk allocation across the chain to preserve investment,
as well as clear fiscal incentives to unlock investment are required to enhance
the potential and viability of gas to power.
John Chibueze,
Partner at Adepetun Caxton- Martins Agbor & Segun (ACAS Law), reviewed the
efforts made by the government to date in boosting the exploration,
development, production and sale of natural gas, but concluded that there
remains a glaring lack of fiscal and regulatory cohesion to support the
infrastructure investment required to significantly increase the country’s
reserve production ratios.