The New Fuel Of Choice For Nigeria’s Economic And Industrial Revolution

Gas Revolution

The New Fuel Of Choice For Nigeria’s Economic And Industrial Revolution

Crude oil has been the choice of fuel for Nigeria for quite a while however with the nation armed with a Gas Master Plan and several key players at work; Nigeria is poised to become the gas hub of west Africa.

When President Buhari put forth the 7 Big Wins platform, his administration ensured that under their watch, the “old’’ Nigeria would slowly disappear while a new era would arise. Focusing on security and the new ease of doing business in Nigeria, they promised progress on reforms in the oil and gas sector. Compared to other alternatives, natural gas is the cheapest available fuel source. However, despite this, the use of natural gas is not as widespread in the country due to limited gas reserves development, inadequate pipeline infrastructure, supply insecurity and the absence of clear fiscal terms. Nevertheless, with a an extensive roadmap in place, the Gas Revolution is on the right track to usher in Buhari’s vision for a next level Nigeria. The recent rise in Nigeria’s current proven gas reserve up to 202 trillion cubic feet allows a more rapid development of the country’s energy sector while revitalising other sectors with the provision of affordable electricity. The earliest large-sized project to be completed to monetise Nigeria’s gas resources was aimed at the domestic market. The one billion cubic feet a day - Escravos–Lagos Pipeline System (ELPS), commissioned in 1989, was primarily intended to supply gas from Escravos region in the western Niger Delta to Egbin power station near Lagos. The 440km-long pipeline, grid length pipeline now supplies natural gas to several industries in the country’s southwest.

The same year that ELPS was completed, the country inaugurated a Liquefied Natural Gas Company: Nigeria Liquefied Natural Gas (NLNG) Limited. Ten years later, in 1999, the first cargo of Liquefied Natural Gas was exported out of a plant on Bonny Island, in the east of the country. Over those 20 years, some six trillion cubic feet of gas have been converted to exports as LNG and Natural Gas Liquids (NGLs), earning the government over thus helping to reduce gas flaring by upstream companies. With six trains currently operational, the entire complex is capable of producing 22Million tonnes per annum (MMTPA) of LNG, and 5MMTPA of NGLs from 3.5Bscf/d of natural gas intake.

The second large export project, the West Africa Gas Pipeline (WAGP) was completed in 2006 and commissioned in 2011. It extends, by 678km, the ELPS, supplying Nigerian gas pumped from Escravos to Benin, Togo and Ghana. WAGP is the first regional natural gas transmission system in sub-Saharan Africa.

The NNPC, in JVs with major IOCs, is progressing to deliver about 3.4 billion standard cubic feet of gas per day to bridge the country’s medium term supply gap.

There are several on-going and upcoming gas projects in the work for the rapid development of the country’s energy sector.

OB3 Pipeline

The 120km Oben-Obrikom-Obiafu (OB3) pipeline has been under construction by the NNPC since 2012. Commissioning is anticipated before the end of 2019. At peak capacity, it would ferry a billion cubic feet of gas every day from resource-rich Eastern Nigeria to the industrialised markets in the west of the country. At 48 inches, it is the largest diameter grid length pipeline in the country.

The Escravos Lagos Pipeline 2

The Escravos Lagos Pipeline (ELP) 2 is a pipeline running near and parallel to the Escravos Lagos Pipeline, in order to double the capacity from 1 billion square cubic feet per day to 2 billion. Recently, Shell and Seplat have separately taken Final Investment Decisions (FID), as operators of two segments of the Assa North Ohaji South gas project. Whereas Shell will add its equity gas and sell to factories, markets and power plants in the neighbourhood; Seplat will construct a spur line from its processing trains to the OB3 and pump the gas to Oben, which has become a gas hub in the Niger Delta’s western axis.

NLNG’S Seventh Train

The NLNG plans to build the Seventh Train of the Bonnybased LNG plant, to lift the total production capacity from 22MMTPA to 30 MMTPA. This 8MMTPA Train will utilise 2.2Bscf/d of natural gas. Progress has advanced with Front End Engineering Design almost completed.

AKK Pipeline

The proposed 614km Ajaokuta-Kaduna-Kano (AKK) pipeline is a continuation of infrastructure build for the domestic gas market. Running from Ajaokuta in Kogi State to Kano through the Federal Capital Territory, Abuja, the AKK construction has been awarded to Oilserv/Oando Consortium and is estimated to cost US$2.8 billion.

The AKK pipeline is envisaged as the first part of the Trans Nigeria Gas Pipeline Project (TNGP) development, a key part of the Gas Master Plan. The second and third parts of the TNGP are located in the south of the country, where the gas reserves are abundant. The TNGP, which is expected to be 1,300km in total length, then 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 Nigerian state hydrocarbon company NNPC, in Joint Ventures with the major international companies, is progressing Seven Critical Gas Development Projects (7CGDP) to deliver about 3.4 billion standard cubic feet of gas per day (to bridge the country’s medium term supply gap by an accelerated basis.

The on-going implementation of the Gas Master Plan 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. Gas will continue to play an increasingly important role to ensure that Nigeria progresses forward towards the next level.