‘Nigeria needs over $100b in non-associated gas fields to address electricity crisis’

Audrey Joe-Ezigbo, Managing Director, Optimera Energy LFZ Enterprise, in an interview with WALIAT MUSA, discusses critical issues in domestic gas expansion.

Given the recently executed Gas Infrastructure Development Agreement with the Lagos Free Zone Authority, what progress has been made in operationalising the agreement?
We are currently building a 25MMscf/d City Gate Station within the zone and other ancillary gas distribution infrastructure including laying a 10” x 6.5km main gas pipeline from the NNPC Gas Infrastructure Company Limited (NGIC) facility to the zone. This strategically positions us to support national industrialisation and boost economic activity – one of the key goals of the Decade of Gas initiative. Our position at the zone will support the activities of numerous international multi-million-dollar companies. Our presence there ensures these companies can easily access gas for their power generation needs, as well as for their feedstock.

What volume of investments is needed to plug the electricity demand gap in Nigeria?
Deliberate investment across the gas and power value chain is required to increase power generation, transmission, and distribution in Nigeria. These aspects, among others, require urgent investment in gas fields y. Over 70 per cent of our power is generated using gas from Associated Gas fields during crude oil production. A concerted effort is required to provide long-term finance to upstream companies to commence the development of gas from Non-Associated Gas (NAG) fields. More investment in NAG fields will unlock more gas to the economy for power generation, industrial use by Gas-Based Industries and Commercial concerns. Investment in developing NAG fields requires over $100 billion potentially creating multiplier effects in the country. Investment in Transmission and Distribution Infrastructure: There is inadequate infrastructure in the value-chain’s transmission and distribution segment, leading to an increasing Technical, Commercial, and Collection (TCC) loss in the sector. These losses disincentive investors from committing more funds to the sector. We require a huge investment in this segment to guarantee the transmission and distribution of power the GenCos will generate. The obsolete transmission infrastructure requires replacement, while the distribution segment of the value needs to be optimised. Collection should be improved upon to provide adequate liquidity for the sector. Nigeria should be well-positioned to attract funds in the face of global competition.

You played key roles in the oil sector for decades, what do you plan to achieve with Optimera Energy?
Optimera Energy, established in 2022, is an indigenous consortium formed by Falcon Corporation Limited, FHN Gas Limited, and ND Western Midstream Limited. It recently secured a 20-year Gas Infrastructure Development Agreement with Lagos Free Zone (LFZ) to supply gas within the zone.

The consortium combines Falcon’s 19 years of experience in Nigeria’s downstream gas sector, operating a 25MMscf/d gas distribution facility in Ikorodu with the upstream expertise of FHN and ND Western, whose combined gas reserves exceed 4 trillion cubic feet. This ensures a reliable and sustainable gas supply to the zone.

Optimera Energy aims to bridge the energy gap in LFZ by providing a cleaner, uninterrupted alternative to carbon-heavy fuels. The company aligns with Nigeria’s ‘Decade of Gas’ initiative, supporting its transition to cleaner energy sources while harnessing its vast natural gas potential for national growth and development.

Recently, the NMDPRA issued Gas Distribution Licences to some sector players. Why was Optimera Energy not included?
The award of the Gas Distribution Licenses to some players in the sector was in fulfilment of the requirements of sections 111, 148-152, and many others, of the Petroleum Industry Act. This was a well-deserved license to pioneering companies that have made significant investments in the Nigerian domestic Gas market with existing infrastructure, of which one of our consortium members, Falcon, was a beneficiary in phase one. Optimera Energy is currently at the last stage of fulfilling the key requirements for its GDL, which is the completion of its CGS with the proposed first Gas delivery scheduled for the second quarter of 2025. We have executed an agreement with upstream partners and with final off-takers, and we are about to conclude the required agreement to grant us access to the main Gas transportation pipeline.

We are optimistic that our company will feature in the list of the next batch of companies to be granted the GDL given our enormous investment in the sector, especially in the face of this current economic landscape.

What comparative advantages does the Lagos Free Zone offer to potential investors?
The Lagos Free Zone is located in the heart of Nigeria’s commercial hub. The Zone is a game-changer for businesses seeking efficiency, global market access, and ease of operations. With world-class infrastructure, a streamlined single-clearance business window, and seamless access to regional and international markets, the zone provides an unparalleled business-friendly environment for investors and manufacturers. The zone will offer bespoke solutions to manufacturers looking to operate in an investment-friendly environment, with an array of tax-free benefits. In addition, it is imperative to mention that the zone owns the Lekki Deep Sea Port, and this offers companies easy access to export their products to the international market.
 
As Nigeria’s energy landscape evolves, gas remains the future fuel. Optimera Energy is dedicated to ensuring that the country’s vast natural gas resources are utilized domestically to power industries, create jobs, and drive economic growth. The journey to a cleaner, more prosperous Nigeria has begun, and we are proud to lead the way.