assurance that the end is near for the
nation's current power crises, as more
gas will be released to feed the power
generating plants in the country.
The assurance was given last week by the
Minister for Petroleum Resources, Mrs.
Diezani Alison-Madueke, in her
presentation titled: "Moving the oil and
gas sector to the next level," delivered at
the 2013 Ministerial Platform in Abuja.
For decades, Nigeria had been plunged
into a seemingly endless energy crisis on
account of a plethora of reasons including
gas supply shortages.
However, the minister disclosed that this
challenge is gradually being overcome by
some giant strides recorded since the
President Goodluck Jonathan put in place
strident measures to address the issue.
To start with, she disclosed that gas
flaring has reduced significantly from
about 25 percent of production in 2010,
to about 12 percent currently. She
explained that this is because every new
oil project has a gas flare reduction
programme.
Secondly, she said that the volume of gas
available for domestic use has also
increased, noting that before now,
volume available was less than 10 percent
of total gas produced.
She added that quantity available for
domestic consumption has increased to
about 1.6 billion standard cubic feet, SCF.
This, she said is attributable to the fact
that gas pricing is almost at par with
international market price put at
$1.50/1000 British Thermal Unit, BTU.
She disclosed that while the power sector
is paying $1/1,000BTU, the non-power is
paying $2/1000BTU, adding that by next
year, the average domestic price of gas
will be over $2/1000 BTU.
Indeed, the minister noted that the issue
with the Nigeria's power sector is not
really gas supply shortages, but
transmission and distribution issues
occasioned by systems collapse.
For example, she recalled that an
Emergency Gas Supply Plan introduced by
government in April 2012, yielded
significant results, as power generation
peaked at 4.2 Gigga watts by August
2012, before it started dropping again.
She further disclosed that the power and
industrial sectors were the highest
consumer of gas locally during the year,
adding that about 1.2 billion SCF/d of the
1.7 billion SCF/d of gas supplied locally
was consumed by the power sector.
Gas reforms
Alison-Madueke maintained that the
development resulted in federal
government's decision to transform the
gas sector, and put it in a better position
to contribute meaningfully to the
development of the Nigerian economy.
She said, "Recognising the potential for
tremendous economic growth inherent in
the nation's vast natural gas resources,
President Goodluck Jonathan outlined a
three-point mandate for natural gas
comprising boost in gas supply to the
power sector.
"Stimulation of gas based industrialization
around Fertilizer, Petrochemicals,
Methanol etc., effectively leveraging gas
as feedstock for key industries, thus
creating jobs and selective investment in
high value regional pipeline and LNG
export opportunities to boost revenues
from gas sales.
The minister further said that the federal
government developed a strategic
objective to link gas to the development
of the Nigerian economy, such as ensuring
that gas is delivered for at least a
threefold increase in Nigeria's power
generation capacity by 2015.
"We also aim to create regional hub for
gas-based industries – fertilizer,
petrochemical and methanol; transform
gas sector to value adding sector and
consolidate Nigeria's position and market
share in high value export markets," she
said.
New gas supplies
Expatiating further, the Group executive
Director, Gas and Power, Nigerian
National Petroleum Corporation, NNPC,
Dr. David Ige, in a telephone
conversation with Vanguard, disclosed
that additional daily 290 million SCF is
expected to come on stream between
now and 2016.
According to him, 100mmscf/d will come
from the Nigerian Petroleum
Development Company, NPDC, a
subsidiary of the NNPC, which will come
before November end, while the
remaining 190mmscf/d will come in over
the next three years between 2014 and
2016, from the Southern swamp,
Forcardos Yokri, Ogidi and Oben.
He said: "2016 will be a critical year for
Nigeria because we will have more than
enough gas to meet all our power needs.
Besides, the Oben-Oben Gas pipeline
would have been completed by then, and
even the stranded gas of about
200mmscf/d – 100mmscf/d from
ExxonMobil and another 100mmscf/d
from Total will now be evacuated."
He noted that the 1.6billion SCF/d now
being supplied to the domestic market is
as a result of intensified gas gathering
activities by oil companies. The listed the
supply as coming from Chevron's Escravos
420mmscf; Shell's Utorogu 320mmscf;
Shell's Ughelli 70mmscf; Sapele 60mmscf;
and Pan Ocean's 100mmscf.
He added that not all of these quantities
can be fired due to transmission
challenges and pipeline vandalism.
Crude oil production
Alison-Madueke put Nigeria's current
crude output at 2.15 million barrels per
day, dropping from about 2.6 million bpd
as at January 2013. She blamed the
decline on the rising cases of pipeline
vandalism and crude theft.
Despite this, she noted that the Nigerian
National Petroleum Corporation's, NNPC,
revenue from downstream retail activities
appreciated by 39 per cent over the last
three years to N151 billion from N219
billion.
According to her, Number of NNPC's retail
outlets increased from 418 to 505
thereby, increasing NNPC's domestic
market share from 12 per cent to 15 per
cent.
She added that the NNPC is eyeing a
more aggressive growth, targeting 42 per
cent of the domestic market share in the
coming years.
Achievements
Listing the achievements of the present
administration in the petroleum sector
between 2010 and 2013, she said, "in the
upstream sector, we have been able to
ensure increased exploration activities,
sustained crude oil production and
increased upstream domestic gas supply.
"In the midstream and downstream, we
ensured gas commercialisation and gas
infrastructure upgrade; repair and
upgrade of midstream oil facilities;
ensured stable supply of petroleum
products; effective and efficient
administration of subsidies and increased
domestic refining."
The Petroleum Minister further stated
that the government is stepping up plans
to grow the Nigerian Petroleum
Development Company's, NPDC,
production capacity to about 250,000
barrels per day of hydrocarbon by 2015
and reserves of 1,517 million barrel of oil
equivalent by 2016.
She disclosed that the largest contributor
to NPDC's production growth will be the
taking over of OMLs 26, 30, 34, 40 and 42,
adding that the NPDC was assigned all of
NNPC's equity in the divested oil blocks
of Shell Petroleum Development
Company Joint Venture.
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