Page 13 - AfrElec Annual Review 2021

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Nigeria’s gas plans

The government has proclaimed a “Decade of Gas” but

may have difficulty realising its ambitions

NIGERIA NIGERIA’S government dubbed 2020 the “Year “[This] 206 tcf reserve was found while look-
of Gas” in 2019, declaring that the time had ing for oil, so it was accidentally discovered,”
WHAT: come to focus on developing the country’s mas- Sylva remarked. “We were actually going to look
Abuja is still keen to sive reserves of natural and associated gas. Offi- for crude oil and we found gas, and in that pro-
promote domestic cials in Abuja talked up gas projects, describing cess of accidentally finding gas, we have found
gasification, gas-to- Nigeria as a gas-rich state that also happened up to 206 tcf.”
power and gas-fuelled to possess oil reserves rather than the other This track record raises strong hopes about
industrialisation way around, and outlined plans for using gas to future exploration campaigns, which will be
improve domestic fuel and electricity supplies more targeted, Sylva said. “[The] belief is that if
WHY: while also increasing exports. we really aim to look for gas dedicatedly, we will
The country’s gas These ambitious plans did not bear as much find up to 600 tcf [17 tcm] of gas,” he stated.
reserves are huge and fruit as Nigerian authorities had hoped. Instead, If Sylva’s prediction turns out to be true,
still growing the coronavirus (COVID-19) pandemic affected the new discoveries would make Nigeria’s gas
the energy industry while in the process of dis- reserves not only the largest on the African con-
WHAT NEXT: rupting the world economy. Demand for fuel tinent but also the fifth-largest in the world. (The
The success of the gas and power declined as a result of lockdowns and West African state is currently in ninth place.)
programme may hinge on other public health policies that curbed business
the passage of the PIB activity, causing oil and gas prices to fall sharply. Disappointing track record
In turn, weak demand made international oil But size alone is not enough to draw investors.
companies (IOCs) more reluctant to commit to Abuja will also need to take steps to convince
new investments, even as travel restrictions gave investors to stay and spend the vast amounts
them yet another reason to decide against send- of money that will be needed to transform this
ing representatives to Nigeria for negotiations. country through gasification, gas-to-power
Despite these setbacks, Abuja has remained and industrialisation initiatives. This is already
committed to the idea of producing, monetis- a tough sell, given that Nigeria is still working
ing and exploiting the country’s gas resources. to establish domestic gas transportation and
In fact, it has expanded the scale of its develop- distribution networks, as well as fully functional
ment strategy to reflect its interest in gas-driven domestic gas markets.
industrialisation and other long-term goals, and It may be even tougher in light of Nigeria’s
in late March of this year, President Muham- disappointing track record on this front. The
madu Buhari announced the formal launch of country has, for instance, been slow to realise
the “Decade of Gas” initiative. the potential of its associated gas resources. Last
“When we declared 2020 as ‘The Year of Gas” week, the Leadership newspaper drew atten-
in Nigeria, it was a bold statement to demon- tion to the fact that the Nigeria Gas Flare Com-
strate our administration’s resolve that gas devel- mercialisation Programme (NGFCP) had not
opment [and] utilisation should be a national accomplished much since its launch in 2016.
priority,” Buhari wrote in a Twitter post. “Now Leadership pointed out that Nigeria’s Depart-
we’re going a step further to dedicate this decade ment of Petroleum Resources (DPR) did succeed
to industrialising Nigeria using gas.” in launching the first round of bidding for the
right to commercialise associated gas produc-
Big numbers tion, attracting preliminary bids from 800 organ-
This move is understandable, given the sheer size isations and short-listing 200 potential investors,
of Nigeria’s gas reserves – and the fact that the all by February 2020. It also stressed, though,
resource base just keeps growing. that DPR had made no progress since then.
Timipre Sylva, the Minister of State for Petro-
leum Resources, highlighted these points over Further delays?
the weekend during a forum hosted by the News The department was supposed to name the win-
Agency of Nigeria (NAN). He pointed out that ners of the first bidding round last June but did
the country’s gas reserves already stood at 206 not do so, citing problems related to the pan-
trillion cubic feet (5.834 trillion cubic metres). demic. “What is holding [up] the programme
Additionally, he noted, these reserves were is COVID-19,” explained Sarki Auwalu, DPR’s
found almost unintentionally, while local and CEO. “Because [the bidders] need access to the
foreign companies were looking for oil instead. flare points ... They have to go and see [them]

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