FG to Build 2500km of Gas Pipeline

Fri, May 30, 2014

By publisher

4 MIN READ

–

The federal government is to complete the building of 2500km of gas pipeline infrastructure by 2018 as part of its efforts to meet market demand for gas

|  By Maureen Chigbo  |  Jun. 9, 2014 @ 01:00 GMT

THE massive investment in gas infrastructure by the federal government will deliver the backbone pipeline for gas in the country by the end of 2018. By this time, the initial phase of building more than 2500km of gas pipeline infrastructure development would have been concluded. The federal government is also planning to construct the longest pipeline in the country from Calabar via Ajaokuta to Kano State. These are all part of efforts at ensuring steady supply of gas to meet up with growing market demand of the product.

Diezani Alison-Madueke, minister of petroleum resources, made this known while delivering a paper entitled: “Encouraging Investment in Gas Production, Supply and Consumption” at a three-day national conference on gas resources organised by the Senate Committee on Gas in Abuja. Alison-Madueke, who was represented by Andrew Yakubu, group managing director, Nigerian National Petroleum Corporation, NNPC, said: “By the end of the year, we will be commencing, via public private partnership, PPP, scheme, the nation’s longest pipeline from Calabar via Ajaokuta to Kano State.”

At present, the federal government is constructing the strategic East-West pipeline while the Lagos end segment of the Escravos to Lagos Pipelines System, ELPS, is nearing completion.  Almost 500km of new gas pipelines have been completed and commissioned including the doubling of the capacity of the EPLS between Escravos and Oben and the extension from Oben to Geregu and River Imo to Alaoji, respectively.

According to her, the government is strategising to leverage on the full potential of gas to achieve massive impact on the economy and the national Gross Domestic Product, GDP. “We are focused on jumpstarting gas supply to enable usage in gas to power, gas based industrialisation, compressed natural gas for transportation and commercial usage, cooking gas for domestic usage and regional pipeline for gas export,” the minister said, adding that for government to support the aggressive short-term demand growth in the power sector, a domestic gas supply obligation regulation which mandates a certain amount of gas supply for the domestic market pending the full maturation of the market was introduced. She is confident that the market will ultimately drive itself for supply growth, and that the long run expectation is for less dependence on supply via obligation.

In order to boost investor confidence in natural gas in the country, the government has reviewed the contractual framework for gas through the development of world-class standardised gas supply agreements in addition to Network Code which governs the flow of gas across the nation’s pipeline network and provides rules for open access. The use of natural gas instead of petrol has translated into significant savings for more than 4000 taxi drivers in Benin who are already using this alternative energy source.

Also,  the federal government’s efforts at eliminating gas flaring is making significant impact as flare out rate dropped from 25 percent to 11 percent of production. “Many of the international oil companies, IOCs, are fast approaching full flare out as the gas obligation and infrastructure growth have all combined to enable utilisation of hitherto flared gas,” Alison-Madueke said,  calling on all stakeholders to put more effort towards full market liberalisation and address the very urgent challenge of increasing supply to the power sector.

Similarly, Yakubu, while presenting a paper entitled: “Nigeria’s Gas Resources, Current and Future Expectations,” at the conference, put the country’s current gas production at about 8.5 billion cubic feet per day (bcf/d). The total production, 3.5bcf/d (41 percent) is exported, 2.3 bcf/d (28 percent) is consumed domestically for power and industries, 1.2 bcf/d (15 percent)  is used in the upstream for gas re-injection and balance of 0.8bcf/d (10 percent) is flared.

In her welcome address, Senator Nkechi Nwaogu, chairman, Senate Committee on Gas Resources, said that Nigeria with per capita consumption of natural gas put at about 1.06kg, ranks lowest in Africa with only 5 per cent of her citizens having access to domestic gas. She said the aim of the conference was to look at ways of filling the huge gap between gas production and utilisation in the country as well as reducing routine gas flaring for the benefit of the nation and its citizens.