"> Reasons Behind NNPC Deepening Investments Around Critical Gas Infrastructure - Sahel Standard
November 24, 2020
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Reasons Behind NNPC Deepening Investments Around Critical Gas Infrastructure

There seems to be a critical thinking around gas development by the federal government; from every inch of measurement, actual investment in line with the declaration of 2020 as Year of Gas for Nigeria, by the Minister of State for Petroleum Resources, Timipre Sylva has started to take shape.

Evidently, Nigeria’s upcoming gas projects are a testament to the potential of the evolving and prosperous gas sector.

To a reasonable level, government appears serious toward encouraging and facilitating special investment in gas, so that the country may increase supply to power companies and move the economy from over-dependence in oil, which currently drives the majority of revenue in the country.

Despite Nigeria’s natural gas reserves, the export of crude petroleum accounts for over 90 per cent of its export earnings.  To this end, Chief Timipre Marlin Sylva, State Minister of Petroleum Resources has declared 2020 as the “Year of Gas”, stating that new initiatives will “drive gas commercialisation to create open and competitive access to Nigeria’s gas infrastructure”.

Under the guidance of the Gas Master Plan, Nigeria is racing toward a future that will generate more power, provide employment and stimulate the economy from within.

According to Engr Sarki Auwalu, the Director of DPR, “Many projects are only waiting for FDI, such as deep-water development and inland basin exploration. It is also evident that the country is now looking more to be a global player rather than a simple revenue earner, which I give credit to the present administration.”

One such project to revitalise the sector is Liquefied Natural Gas, LNG Train 7, which is an exciting new expansion of Nigeria LNG’s existing plant, that currently has six operational trains at work.   Located on Bonny Island in Rivers State, the plant is capable of producing 22 million tonnes per annum of LNG (liquefied natural gas). This proves to be an incredible benefit for Nigeria as the LNG demand expected to increase by 72 per cent between 2017 and 2030 globally.

LNG Train 7 is in accordance with the current administration’s Gas Revolution because gas is a cleaner form of energy and this project will spur Nigeria’s gas sector for the industrialisation agenda, which is focused on domestic consumption rather than exportation.

Another benefit of LNG Train 7 is that it will create over 40,000 direct and indirect jobs in Nigeria for local content, improving livelihoods on an even larger scale. This project is coming at the right time as Nigeria seeks to invest in new production and as the nation readies for more foreign direct investment, just as it continues to excel among the top rankings of global LNG exporters.

The AKK Pipeline   

The Ajaokuta-Kaduna-Kano (AKK) pipeline is a 614 kilometer long natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC) and is a continuation of infrastructure build for the domestic gas market.   The pipeline is slated to originate from Ajaokuta and pass through Abuja and Kaduna before ending at a terminal gas station in Kano.   The AKK pipeline is envisaged as the first part of the Trans Nigeria Gas Pipeline Project (TNGP) development.

“The AKK pipeline is part of the gas masterplan,” says Emeka Okwuosa, CEO of Oilserv. “It is going to move 1.5 billion scf of gas a day and provide resources for power generation and other energy requirements. It is not only a development of the north; it is such for the entire country. So, this single project can transform the whole of Nigeria in terms of industrial capacity.”

The TNGP, which is expected to be 1,300km in total length, forms a piece of the Trans Sahara Gas Pipeline (TSGP) system, which is envisaged to pump Nigerian gas through Algeria or Morocco to Europe. The pipeline project is being implemented via a build and transfer public-private partnership model, which harnesses the strength of both the private and public sectors. Not only will this increase gas availability, but the AKK natural gas pipeline will also reduce gas flare and environmental impact.  The government plans to ensure that gas significantly contributes to the power sector, and the AKK natural gas pipeline is aligned with that agenda.   The pipeline is intended to boost Nigeria’s electricity generation capacity, as well as strengthen the industrial sector within the country’s eastern and northern regions. The project is also expected to promote and increase the local usage of domestic gas, which will enable power-starved communities across the country to have greater access to electricity while providing stranded commercial and industrial customers with a cleaner and more efficient source of energy.

On this note, Mele Kolo Kyari, Managing Director of the Nigerian National Petroleum Corporation, NNPC, said: “We believe whatever can be achieved internationally, can be achieved locally. We are also counting on the support of our local and international partners, service providers as well as regulators across the industry value chain.”

Additionally, the AKK pipeline is anticipated to increase the country’s revenue generation through the export of natural gas. The on-going implementation of the Gas Master Plan will continue to play an increasingly important role to ensure that Nigeria progresses forward towards the next level.

NNPC To Champion Domestic Gas Delivery

The Nigerian National Petroleum Corporation (NNPC) has restated its commitment to working with relevant partners and stakeholders in the Oil and Gas Sector to boost delivery of gas to the domestic market.   The Group Managing Director of NNPC, Mallam Mele Kyari, said the Corporation will Key into the Nigerian Gas Transportation Network Code (NGTNC) which is designed to enhance the use of gas as a catalyst for national economic development.

Essentially, the NNPC, is at the centre of gas delivery to the domestic market, and deeply involved in all the available gas delivery infrastructure in the country either directly or indirectly through joint venture partnership.   Thus the energy company sees the inauguration of the Network Code as an opportunity to enhance gas delivery and utilization in furtherance of the Federal Government’s objective of transforming gas into a key component of the nation’s energy mix and revenue sources.

“We will continue to give our support to this process to ensure that the full delivery of this process is achieved. We commit to working closely with the DPR to ensure that the target of the government is attained.  This opportunity has provided the right framework for the transportation of gas from the source to the end user in order to get value. We are happy to have this framework on ground and we are ready to collaborate with all our partners, the gas off-takers, gas producers, transportation companies, shippers, and all those involved in the gas value chain,” Mallam Kyari said.

On the significance of the Nigerian Gas Transportation Network Code (NGTNC), the Minister of State for Petroleum Resources, Chief Timipre Sylva, said it would help to grow gas infrastructure, expand gas utilization, curb gas flaring, and provide codes to standardize the gas value chain in line with global best practices.

The Minister said the NGTNC which was unveiled on Monday was part of the key reforms instituted by the President Muhammadu Buhari Administration to expand domestic gas-to-power, gas-to-Industry, gas-to-manufacturing and mitigate the challenge associated with gas flaring in the country.  He noted that the gas codes would go a long way in deepening economic development, improve gas supply, boost Liquefied Petroleum Gas supply, and attract more investment opportunities in the nation’s gas value chain.  Chief Sylva commended NNPC and its gas subsidiary, the Nigerian Gas Company (NGC), for partnering with the Department of Petroleum Resources (DPR) to meet the six-month target to bring the Network Code to life. (By Leadership Newspaper)

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