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The Quiet Gas Revolution In Nigeria

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By Idang Alibi

“This is the beginning of Nigeria’s gas revolution. Today marks the day we have been waiting for in the past 30 or more years.’’

These were the ecstatic remarks made by the Honourable Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, moments after the signing of a Gas Sale and Aggregation Agreement by Greenville Oil and Gas Company Limited and the Nigerian National Petroleum Corporation/Total Joint Venture and the Gas Aggregation Company of Nigeria in the Minister’s Board Room at the NNPC Towers, on Tuesday 29th August, 2017.

The Gas Sale and Aggregation Agreement (GSSA) Minister Kachikwu was referring to was for the delivery of 74 million standard cubic feet (MMscf) of gas to the Greenville Oil and Gas Company Limited’s US$500m mini-LNG facility in Rumuji, River State. Under the agreement, Nigeria is to make available to Greenville, a Belgian oil and gas company, a daily supply of 74 million standard cubic feet to the company’s mini-LNG plant at Rumuji near Port Harcourt, Rivers State which sits on an area of 97 hectares of land. Greenville will then process the natural gas in its 22250 tons per day installed facility into LNG and use her initial stock of 250 trucks to distribute the products across the country for domestic consumption.

Greenville has today become the pioneer Nigerian domestic LNG producer with the main objective of extending gas supply to regions not served or under served by gas pipelines with the hope of producing cheaper energy to many companies and households for industrial and domestic uses.

The agreement signing ceremony was actively supervised by Minister Kachikwu. The ceremony also had in attendance the representatives of Nigerian National Petroleum Corporation (NNPC), Total Exploration and Production Nigeria Limited (TEPNG), Greenville Oil and Gas Company Limited (Greenville) and Gas Aggregation Company of Nigeria (GACN). The Executive Committee of the Nigeria Gas Association led by its President, Mr. Dada Thomas, was also there to witness the historic deal.

Minister Ibe Kachikwu in particular had every cause to be happy and to even beat his chest in some form of self-congratulation because what had just unfolded was masterminded by him in fulfilment of one significant arm of the 7 Big Wins programme, the short and medium term priority plans for growing the oil and gas industry which was launched in September last year by President Muhammadu Buhari. The execution of that agreement was a remarkable milestone in the development of Nigeria’s gas market because it fits into the Buhari Administration’s plan to diversify the economy from crude oil to gas based industrialisation.

The rationale for the on-going shift in favour of gas is that Nigeria is even more of a gas producing nation that an oil producing one. It is interesting to note that the most dominant natural resource Nigeria has is not crude oil but gas. Nigeria is known to have a proven natural gas reserves of 188 million cubic feet (tcf) and she is ranked 9th amongst countries with the largest gas reserves in the world after Iran, Russia, Qatar, Turkmenistan, USA, Saudi Arabia, UAE and Venezuela.

That volume of Nigeria’s gas reserves will last longer than our crude oil reserves and earn us more revenue than oil in the longer term. What is more, with many prophecies that in the next 15 or more years oil will cease to be a major foreign exchange earner for the nations that produce it, it is just as well that Nigeria is moving much more strongly in the direction of gas. In today’s environment-conscious world, gas is a more environment-friendly energy source than crude oil which has such a ruinous effect on the environment.

One tragedy of the Nigerian gas situation which the arrangement with Greenville hopes to cure is the fact that Nigeria currently produces about 22 million tons of Liquefied Natural Gas (LNG) all of which she exports with not a single drop for domestic consumption!

But following the August 28th agreement Greenville will ensure that domestic LNG market will be serviced. Greenville is to the LNG domestic sector what MTN is to the Nigerian telecommunication sector. As happened when MTN opened the mobile telecommunication floodgate and others flooded in, it is expected that with the pioneering role of Greenville in Nigeria, other gas companies are likely to follow in droves as LNG is said to be far cheaper and more environment- friendly than other forms of energy such as AGO and DPK.

For a man like Kachikwu who is not given to speaking in hyperbolic terms, his euphoric outpouring at the agreement signing event, no doubt, reveals the depth of his feeling on what is, by all standards, a landmark achievement in the nation’s oil-dependent economy. The recent revelation by the National Bureau of Statistics (NBS) that Nigeria has ridden herself out of recession due largely to the performance in the oil and gas sector, should be heart-warming to the man superintending our oil and gas affair. The increase in revenues earned from the oil and gas sector is what has proved pivotal in increasing the growth of about 0.55 percent in Nigeria’s GDP. That sector, with especial focus now on gas, still holds the hope for Nigeria’s economic salvation even as valiant efforts are made to diversify the economy away from fossils fuel.

Indeed, for President Muhammadu Buhari and his deputy minister, oil is what brought Nigeria low but they nevertheless believe that the astute management of the critical hydrocarbon sector is what will get Nigeria permanently out of recession and bring long lasting growth and development to the nation’s economy. Ramping up revenues from oil and gas will hasten Nigeria’s economic recovery agenda.

What will be the benefits of developing gas and marketing it? The economic and other pay-offs are too numerous, according to experts. Development and popular use of LNG in Nigeria will reduce the notorious Greenhouse Gas Emissions, reduce gas flaring especially in the already devastated parts of the Niger Delta region; it will also reduce transport cost and the cost of fuel importation and it will lead to the growth of industries, the growth of employment and the overall growth of the national economy. The Greenville deal, for instance, is calculated to create thousands of direct jobs and hundreds of thousands of indirect jobs. LNG which is held as the energy of the future has innumerable social, economic and environmental benefits.

What was done on August 28 is what we ought to have been doing since the discovery of hydrocarbon in commercial quantities oil in 1956 and the discovery also that Nigeria is a gas province with oil in it. But, as the saying goes, it is better late than never.

 

Idang Alibi is the Director, Press and Public Relations, Ministry of Petroleum Resources.

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