ARTICLESHarnessing Nigeria’s gas potential – How?

Harnessing Nigeria’s gas potential – How?

By Theo Inerie


Nigeria’s electricity power landscape has for long been characterised by epileptic supply. A current pioneering attempt to tackle this challenge is through natural gas powered electricity generating stations.

Natural gas is one of the nation’s resources and estimates puts Nigeria’s reserve of natural gas at about 186 trillion cubic feet. However, various reports show that a shortage of natural gas supply into the country’s electricity generating plants has led to a shortfall in the power generating capacity of some of these power plants.

The question therefore then is: where is the gas?

One of the challenges leading to this shortfall is that several E&P companies have been unable to develop their blocks and drill hydrocarbon prospects in their fields so as to find or boost reserves. Another major easily observable obstacle is a lack of infrastructure. When these major natural gas deposits are discovered, usually it is an uphill task putting in place the facility for converting the gas into methane useful for power generation as well as transporting this product to the requisite end users.

Additional difficulties include lack of favourable or definite financial and regulatory policies (a good example is the current stall on the passage of the PIB); as well as the struggle to attract investors due to the current downturn oil and gas prices along with politico-social problems of the country and its attendant effects (such as routine pipeline vandalization).

How to untie this Gordian knot?

As regards the lack of infrastructure, in addition to the present-day efforts of government to address this malaise, public - private partnership financing of such projects will greatly enhance the provision of such facilities needed to process and transport produced natural gas. Already, various schemes in this vein have been initiated with successful results in creating processing plants and pipeline network to transport the gas to the power plants.

A proposal that has been made to Independents and Marginal Field Operators is for them to go for an integrated system that would include a small scale refinery or LNG plant which they can customise to suit their needs. Some of these units can even be mobile and movable from one location to another as the case may be. In same vein, an alternative way of solving the lack of natural gas transportation infrastructure impasse is the use of mobile natural gas transportation system such as trucks or barges. Already, some E&P companies move their crude oil via such means and this can be easily replicated for natural gas.

An additional key suggestion to achieve the aforesaid propositions is collaboration between the E&P operators. Asset owners should be willing to share data, assets and work together as much as possible to achieve the ideal of effectively harnessing the country’s hydrocarbon potential. An absence of clear policies and directives with regards to this and other aspects of the emerging gas to power market has limited this integration. The early passage of the PIB or enactment of other regulations to address observed shortcomings would go a long way to quell this challenge.

 

Discovery of novel sources of natural gas reserves in addition to the current ones is necessary to effectively provide gas for the growing power and other sectors of the economy. In this regard, a facet sorely lagging in Nigeria is Research and Development. One way of curtailing this would be for the government to partner E&P companies to create a Research Institute solely devoted to researching about the sourcing, development, production and effective utilisation of natural gas and its products.

The revenue from effective utilisation of natural gas products will create wealth and employment opportunities for Nigerians and businesses thus curbing most of the socio-politico problems especially with respect to pipeline vandalization and hydrocarbon producing host communities’ agitation.

Right now there is an immense avenue to boost the search, discovery and production of natural gas. This is possible due to the availability of various hydrocarbon blocks awarded during past bid rounds which have been left dormant by its owners. A recommendation is that these blocks be re-awarded to interested parties ready to undertake exploration activities. Also, the long awaited bid round should be held in order to pave the way for new entrants into the industry,

 In this regard, Rocksolve offers expertise to explore and develop such reserves as well as deliver first production safely at shortest time and lowest cost.