Proved reserves of 209.5 trillion cubic feet (tcf) are estimated at more than $800 trillion, making Nigeria the largest gas reserves in Africa and ninth in the world. An attractive option to address environmental concerns and reduce carbon emissions.
Surprisingly, despite these huge reserves, Nigeria consumes about eight billion standard cubic feet (bscf) of gas per day, and most of it is sent to the export market.
Analysts have said positioning energy needs to embrace gas derivatives – liquefied natural gas (LNG), liquefied petroleum gas (LPG), compressed natural gas (CNG) – and transition from fossil fuels to renewable energy will help alleviate the current global energy crisis. This is more because CNG and LPG are better alternative fuels than petrol and diesel.
Nigeria’s abundant gas reserves offer significant economic opportunities. Undoubtedly, the development of a strong gas sector attracts investments, creates jobs, stimulates economic growth, as well as promotes technological advancements, research and development and innovation in the gas sector.
Stakeholders unanimously agreed that there are many advantages to switching to autogas and gas power. This will help in energy diversification. Nigeria is rich in natural gas reserves, and the development of this resource presents a valuable opportunity for energy diversification. Currently, the country is heavily dependent on oil as our primary source of revenue and energy. By embracing gas, the country can diversify its energy mix, reduce dependence on a single commodity and improve energy security.
Speaking on this, the President of Nigeria Liquid Petroleum Gas Association (NLPGA), Mr. Felix Egundayo, an umbrella organization of cooking gas producers and marketers, said the opportunities created by the removal of petrol subsidy would further develop the gas sector. It is the most available alternative fuel in automotive and industrial sector.
He also said that Nigeria could save N1 trillion by undertaking the autogas conversion initiative that will enable vehicle engines and power generating sets to run on gas as an alternative to fossil fuel and diesel.
By moving towards gas, Nigeria can significantly reduce its carbon footprint and contribute to global efforts to combat climate change, analysts say. Embracing gas helps improve air quality, reduce pollution-related health problems and protect the environment. It also plays an important role in power generation. Nigeria is grappling with significant challenges in its electricity sector, including inadequate power supply and frequent blackouts. Gas-fired power plants provide reliable and efficient power generation. Expanding gas infrastructure and promoting gas-fired plants will address our power deficit and contribute to economic growth.
Similarly, it has many industrial applications including manufacturing, petrochemicals, fertilizers and transportation. By embracing gas, Nigeria can stimulate industrial growth and attract investments that will create jobs, improve local manufacturing capabilities and contribute to economic growth.
It also serves as a reliable and affordable source of energy for domestic use. It can be used for cooking, heating and powering electrical appliances in homes. Promoting gas use for residential purposes could reduce reliance on traditional biofuels such as wood, charcoal or kerosene, which contribute to deforestation, indoor air pollution and health risks.
There are also commercial and employment opportunities by increasing autogas facilities from less than 100 at present to over 12,000 in the short and long term. Also, autogas conversion and associated increase in cylinder manufacturing centers will increase the required conversion of more than five million vehicle targets, and spur massive infrastructural and economic growth. By the same token, this will further reduce the percentage of carbon emissions from the transport sector, thereby increasing the chances of achieving net zero targets by 2050/2060.
Although Nigeria has benefited greatly from the transition to efficient gas utilization, the industry is still not well positioned to harness and utilize our gas resources effectively, mainly due to the lack of necessary infrastructure and establishing the necessary infrastructure. In place, huge investment is required.
Government policies and incentives will be needed to attract private investment and create an environment for gas exploration, production and utilization. Public awareness campaigns and education on the benefits of gas will help promote its adoption among Nigerians.
In what stakeholders termed a right step in the right direction, the central government has begun sensitizing operators on the need to urgently obtain the required petroleum storage license and shift from white products to gas. While announcing that unlicensed sellers of petroleum products will not be allowed to load products from August 1, 2023, it warned that anyone who wants to handle petroleum products must obtain a license, promising to shut down such businesses from that day. „No license, no loading of any petroleum product.”
The warm-up was delivered by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMTPRA), which recently concluded a stakeholder engagement on gas utilization across six geopolitical zones in Nigeria, Lagos (South-West), Enugu (South-East), Rivers. South-South), Bauchi (North-East), Kano (North-West) and Abuja (North-Central).
The Chief Executive of the Commission, Engr Farouk Ahmed, said the engagements seek not only to operate within the regulatory space of major consumers of petroleum products but also to identify the comparative advantages between the various fuels designated as Nigeria’s replacement. Fuel.
According to him, the Commission is committed to implementing the autogas policy of the Central Government, adding: “It is in this regard that the Central Government has set up various initiatives and policy frameworks including the National Gas Expansion Plan (NGEP) and Gas Decade. Program (DOGP). The Petroleum Industry Act (2021) also established the Midstream and Downstream Gas Infrastructure Fund in the Commission to promote gas investments. These efforts are yielding significant results, although more collaborations and interventions are needed to improve domestic gas consumption. Empowered by the Petroleum Industry Act (2021), the commission is poised to implement the development of the industry. The recently gazetted 12 regulations open up golden opportunities and mark the path to energy security.
„Hence, it is our hope that this engagement will create the necessary awareness and make a compelling case for industrial operators to foster a culture of compliance that guarantees safe and sustainable facilities”.
12 gazette regulations open up golden opportunities and mark the path to energy security: midstream and downstream petroleum operations, natural gas pipeline tariffs, gas pricing domestic demand and supply, petroleum metering; Determination of Petroleum (Transport and Export), Allocation and Transfer of License and Permit, Gas Distribution System, Gas Trading and Settlement Regulations, National Strategic Stocks, Midstream and Downstream Penalties and Enforcement Mechanisms, Midstream Gas Flare Regulations and Allstream Petroleum and Disream Supply Regulations.
Data obtained from NMDPRA shows historical and future consumption (2015 to 2030) of Automotive Gas Oil (AGO) also known as Diesel and LPG. While AGO consumption increased from 2015 and peaked in 2020, the trend showed a decline in consumption and this is projected to continue until 2030. Specifically, its consumption is predicted to decrease by more than 50 percent in 2030 compared to 2015.
On the other hand, data revealed widespread use of LPG in vehicles, households, power generation and industrial applications in Nigeria, with its consumption projected to increase by more than 500 percent over the same period. The demand for LPG is projected to surpass that of diesel by 2025.
Similarly, the number of gas depots in the country has increased from 12 to 27 between 2017 and 2022, while CNG facilities have grown from 97 to 102 over the same period, while LNG facilities have increased from five to 42. And LPG filling plants have increased from 675 to 1,338, an increase of 98 per cent.
This initiative is already bearing fruit as many domestic companies are making significant investments in CNG facilities. Recently, Innoson Vehicle Manufacturing (IVM) announced mass production of CNG buses, while NIPCO – an indigenous downstream petroleum and gas operator – has taken the lead in converting petrol-powered vehicles to autogas. More gratifying is the fact that oil marketers have recently revealed that in addition to the existing 4,000 trucks running on gas in Dangote companies, about 800 tankers that previously carried petrol to petrol stations will start moving gas to retail outlets. The government has identified more than 10,000 stations offering autogas to the public.
In conclusion, embracing gas as an energy source is critical to our sustainable development. Industry experts say that by tapping into its abundant gas reserves, the country can address environmental concerns, diversify its energy mix, improve power generation, spur industrial growth, meet domestic energy needs and unlock significant economic opportunities. Ultimately, it is a win for the government, the governed and our environment.
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