Oil & Gas
By Anthony Isibor
A former managing director of the Nigeria LNG, Tony Attah, has urged all the stakeholders in the Nigerian oil and gas industry to actively pursue the development of its gas reserves as a matter of urgency.
Attah, who is also an Independent Energy Consultant stated that Train 7 alone is no longer ambitious and ”we should borrow from the inspirational submissions of the IPPG chairman and the GCEO of NNPC during the 2024 NOG conference where they both posited that, Nigeria needs to declare a state of emergency in the oil and gas sector to be able to attract the much needed focus and drive, to unleash our upstream oil and gas resource base, which will enable more midstream development projects, including the now famous Floating LNG projects.”
Speaking on the Future of gas, Nigerian economy and the global energy transition at the Petroleum Club, Attah stated that although so much has already been done in the development of gas infrastructure, much more need to be done.
He said that Nigeria needed to scale up domestic gas development alongside gas for export. With the recently launched national programme on CNG, we need to be more deliberate to include LPG and grow the national domestic gas capacity by at least doubling the current gross daily production level to about 5bcf/d, in the near term.
According to him, this will catalyse the power sector, unleash manufacturing by bringing down the cost of manufacturing by over 50%, thus stimulating the economy and creating the much-needed jobs and employments through large scale industries and SMEs.
“The total spinning reserve or generating capacity in Nigeria, for over 200mln people, is just about 20,000 MW with only about 5,000MW available to the consumers. Whereas countries like South Africa with about 60 million people have over 50,000MW, Egypt has 60,000MW for 100mln people and Algeria has 22,000 MW for 45 million people. Overall Egypt, Morocco, Tunisia and Algeria have nearly achieved 100% electricity access for their people through very deliberate and focused policies and investments. We are way below the standard of 1000MW per 1 million people! This simple rule of thumb would of necessity require that Nigeria should have a minimum of 200,000MW power generating capacity, which based on a very rough calculation would amount to needing about $10 billion per year for the next 20 years, to have a fighting chance of moving the needle on the much-needed catalyst for industrialisation and the emancipation of the Nigerian economy.
“I was personally very excited and grateful to be part of that history, following which we went ahead to sponsor the “Decade of Gas” agenda, working with the Ministry of Petroleum Resources and NNPC as the much-needed catalyst to jump start our gas revolution, looking to create a conveyor belt of upstream gas developments and midstream LNG investments in Train 8, 9 and perhaps Train 10. While the Train 7 project will add about 35% capacity to move NLNG from the current 22MTPA to about 30MTPA, Qatar has also taken a very deliberate investment decision to add a whopping 30MTPA to its current 77MTPA to ensure it returns to No.1 when completed.
“Essentially, our whole NLNG capacity at 30MTPA by the end of 2025 when we commission Train 7, will be equal to Qatar’s incremental capacity project despite our massive gas reserves. Distinguished ladies and gentlemen, no nation can develop and grow its economy without electricity! In other words, the growth of a nation will be largely underpinned by the growth and availability of electric power which in our case means the upscaling of domestic gas supply to release the available gas-fired power plants capacity. We are currently struggling with grid power supply and universal electrification in Africa where about half of the people are without direct access to electricity and in Nigeria, we also struggle with the entire electricity value chain-misalignment between power generation, transmission and distribution.”
Attah adds that for Nigeria’s economy to grow and recover from the current weak position and revenue crisis, the oil and gas industry must succeed, being the largest contributor to national foreign exchange earnings.
“For Nigeria to grow and achieve sustainable cross-sectoral diversification and industrial catalyzation, the oil and gas sector must grow, and we can confirm the correlation with a simple fact check on the times we have had economic booms being directly linked to when the industry enjoys a boom. It is thus, not out of place to say that the oil and gas industry is the nerve center, if not the brain box of Nigeria’s economy.
The fastest way of resolving the ongoing revenue crisis is to revitalize and galvanize the oil and gas sector by accelerating the implementation of the recently approved executive orders and the ongoing IOC divestments to restore confidence and stability in the industry.
“To underpin and future proof our economy from the vagaries of the energy transition and the changing energy dynamics we need to attract massive investments for gas development. These massive investments and the ready availability of gas will not only galvanize our economy, but it will also energize it. This will change the narrative on availability of power, availability of clean energy sources and availability of feed stock for gas-based industries.
“For all of these to materialize, we will need to deploy what we have to achieve what we want. I make this statement carefully, noting that no nation can stand alone against the backdrop of the Energy Trilemma and the ongoing energy Transition.
“Therefore, the key economic growth opportunity must be hinged on massive gas development, specifically on deliberate new Gas Exploration to rebase our gas reserves. Essentially government needs to do everything, including granting additional and far-reaching fiscal incentives and moratorium over and above the PIA fiscals focused on gas development, infrastructure and cost reflective pricing as the main pillars on which our industrialisation will be anchored. The potential 5bcf/d local market for gas is huge and we must therefore domesticate a significant part of the gas development to drive our national economy, consistent with the President Bola Ahmed Tinubu’s Renewed Hope and Decade of Gas agenda to under pin the economy with gas by 2030. This focus on gas via the recently approved executive orders on NAG development and the structural improvement of our ministerial portfolios to include the “Minister of state for Gas” is definitely in the right direction, however we may need to be more bullish to adjust our ministerial portfolios to focus on integrating Oil, Gas and Power but to also consider restructuring or consolidation to have a Minister of Energy to enable the full integration of the Oil, Gas and Power ministries.
“With the fierce urgency of now, developing and producing our oil and gas reserves, has got to be the main agenda going forward!! Suffice it to add that, we will need investors, and the investors would need to satisfy themselves that their investments would realise sufficient profitability in the face of mitigable risks, hence, they would require assurances and clarity on fiscal stability, sanctity of agreements and enabling regulatory policies to enjoy competitive returns in a guaranteed market like ours,” he added.
“Distinguished ladies and gentlemen, the moment of truth is upon us as a nation and we cannot sit on our hands and watch while the world moves on, whilst we continue to play the ostrich because we have 37 billion barrels of oil and 210Tcf of gas reserves which as I said earlier remain as just potential and not value adding as long as these reserves remain in the ground. The existential challenge to surmount the trilemma and keep our economy afloat will require very deliberate focus on gas as Qatar has demonstrated with a clear and replicable template for us to copy.
This could well be the golden opportunity for us to leap frog and unleash our economy, making it more robust, sustainable and resilient to survive the vagaries of the energy transition and the fast changing energy mix.
“Distinguished ladies and gentlemen, we have plenty of gas to make this happen; Plenty of gas to unleash our economy,” he said, adding:
• Gas is Power as in Electricity
• Gas is Food as fertilizer for Agriculture
• Gas is Petrochemicals as feed stock
• Gas is Industrialisation as catalyst for SMEs
• Gas is Employment as in LPG for cooking
• Gas is Transportation as in CNG
• Gas is Political and economic Power
A.I
Sept. 27, 2024
Tags: Anthony Isibor NIGERIA LNG NNPC Tony Attah
