Monday, 2nd October 2023

FG to expand national grid size, leverage hubs for gas pricing

By Femi Adekoya
26 February 2021   |   3:03 am
The Federal Government, through the Nigerian National Petroleum Corporation (NNPC), has announced plans to increase the size of the national grid by leveraging the country’s 203.16tcf gas potential

Over 30km of welding completed on AKK project, says NNPC

The Federal Government, through the Nigerian National Petroleum Corporation (NNPC), has announced plans to increase the size of the national grid by leveraging the country’s 203.16tcf gas potential in order to resolve lingering power sector issues nationwide.

Similarly, the oil company hopes to address pricing issues in the gas value-chain to increase adoption and utilisation in the industrial sector.
Gas pricing and dollarisation have remained a challenge among gas providers and industrial users.
Besides, the NNPC noted that the AKK project is well on course, stressing that over 30 kilometers of welding have been achieved.
“We do not see anything that will stop the project. We are hoping to cross the River Niger by Q1 and by then, we will lay pipelines to create a highway that will move the huge gas resources in the area to the west,” says NNPC.
The Group Managing Director, Mele Kyari, stated that more efforts are required to unlock the liquidity in the downstream sector while expanding the transmission network.
Kyari, represented by the Chief Operating Officer, NNPC, Yusuf Usman, at the virtual 12th Nigerian Gas Association International Conference 2021, said that plans were ongoing to unlock the 203.16 tcf of proven gas the nation has onshore and offshore.
In his words: “The asset that would deliver 4.5 tcf of gas has been identified. Looking forward in terms of gas utilization in the power sector, our projections have shown that 60 to 70 per cent of the gas that forms the basis of the 4.5 tcf will come from power.”
Meanwhile, the Minister of State for Petroleum Resources, Timipre Sylva, has stated that the Federal Government is pursuing programmes to grow its gas economy through the development of industrial and transport gas markets, in juxtaposition with gas-to-power initiatives.
According to him, gas will become the dominant fuel for generating power not only in Nigeria but in Africa as well, pointing out that utilising natural gas is already helping to reduce carbon dioxide and improve air quality where it replaces coal or diesel.
Represented by the Technical Adviser, Gas Business and Implementation, Ministry of State for Petroleum Resources, Justice Derafaka, Sylva noted that gas would also continue to play a critical role in sectors where demand is anticipated to grow but difficult to electrify such as steel production, cement and chemicals as well as long-distance transportation.
Sylva added that the development of Nigeria’s vast gas resources and strengthening of the gas value chain is Federal Government’s national priority as encapsulated in the National Gas Policy of 2017, maintaining that the Buhari-led government carved out strategic priorities for the Ministry of Petroleum Resources to stimulate the sector to foster the sustainability of the Nigerian economy, enhance energy availability, create well-paid jobs, and take millions of Nigerians out of poverty.
He said despite the global challenges, the Federal Government had embarked on a critical pathway to ensuring that the over 200tcf proven reserves of natural gas in Nigeria are marshalled to engender domestic economic growth and development.
He added the proposed PIB now before the National Assembly when passed into law will also unlock several midstream gas opportunities to further enhance domestic gas utilization, adding that the revised PIB framework is based on core principles of clarity, dynamism, neutrality, open access and fiscal rules of general application.
The NNPC boss further added that Nigeria has recorded some successes after the Minister of State of Petroleum Resources declared 2020 as the year of gas, stating the need to promote gas as a transition fuel.
He said going forward in 2021; NNPC has announced the FID for a $3.5 billion fertilizer and petrochemical company that will produce about 300 million scf of gas, two ethanol plants.
He also stated that plans are ongoing to establish two gas hubs to create a situation where an announcement on gas prices will happen and industries will be able to make references in Nigeria for gas pricing.
In his words, “We hope to achieve that in the period to consolidate the gains of the decade of gas in Nigeria. A lot is happening in the gas sector and that is why we have all been given a presidential mandate to deliver.”
The Governor, Lagos State, Babajide Sanwo Olu, said the State is building capacities and partnering with major players to deepen LPG consumption in the State.