According to the Nigeria Extractive Industries Transparency Initiative (NEITI), the country needs $20 billion a year to bridge its gas infrastructure and implement the desired gas expansion plan.
The NEITI Executive Secretary, Dr. Orji Ogbonnaya, stated at the policy dialogue on Nigeria’s Decade of Gas Action Plan on Monday in Abuja that it was important to be clear about the infrastructure projects that should be prioritised given the declining fossil fuel investment landscape.
The Natural Resource Governance Institute (NRGI) and the African Initiative for Transparency, Accountability, and Responsible Leadership (AFRITAL) collaborated to organise the dialogue.
The National Gas Expansion Programme (NGEP), launched by the Federal Government in December 2020, aims to expand the use of natural gas and make it the preferred source of less expensive, cleaner energy for both residential and commercial use.
Orji stated that Nigeria had gas reserves totaling more than 200 trillion cubic feet (tcf), making it the country with the largest gas reserves in Africa and the ninth largest in the world.
“The Petroleum Industry Act (PIA) provides the most significant progress for the gas sector in strengthening governance and providing fiscal frameworks for the sector’s growth.
“The gas utilisation plan should show the market-driven opportunities that would successfully translate the gas plans into sustainable economic development.
“For the gas utilisation policy to work, there is a compelling need for deliberate and ambitious investment in its infrastructure. This includes specific connectivity across upstream facilities to processing facilities, power plants, and other end uses.
“The network code provides a framework through third-party access to resolve some of the connectivity issues, but to a large extent, achieving the desired gas expansion will require an estimated $20 billion annually,” he said.
Orji stated that a new concept analysis would be required to demonstrate the new approaches the government intends to take in order to deliver on the gas infrastructure.
He suggested that the federal government create and publish a detailed, realistic, coated, and comprehensive gas policy with clear roles for state and non-state actors, as well as timelines to track periodic progress.
Orji pleaded with the government to create an industry-specific connection between the integrated gas policy and Nigeria’s energy transition policies, along with a supporting action plan based on a strong monitoring and evaluation framework to track implementation.
He also demanded a thorough strategy to stop gas flaring through a private sector-led commercialization programme and pursue a free, open, and transparent gas flare commercialization programme.
The Executive Director of AFRITAL, Dr. Louis Ogbeifun, had earlier bemoaned the fact that despite Nigeria being so rich in gas, the majority of its citizens still use firewood or coal for cooking, with all the associated health risks.
“Over the years, Nigeria has acted like the prodigal son, exporting mineral resources to earn dollars for consumption rather than saving, reinvesting in revenue, and creating jobs.”
“These analogies reflect the paradox of being a rich but poor country.” “Rich because Nigeria is vastly rich in minerals and energy resources, but poor because most citizens lack access to affordable electricity and other essential social and welfare benefits,” Ogbeifun said.
He stated that the 2021–2030 government legislation dubbed the “Decade of Gas Action Plan (DofG)” was enunciated in order to reverse the highlighted negative narratives and achieve energy accessibility, affordability, and sustainability as a country.
He asserts that Nigeria is anticipated to experience significant growth in its gas infrastructure during the period if the government’s intentions are successfully carried out.
The 614km Ajaokuta-Kaduna-Kano gas pipeline, which will carry about two billion cf of natural gas daily, was built, according to him, and is one of the first steps towards realising the DofG’s objectives.
“This and other initiatives are also intended to increase the country’s use of LPG and CNG and, in the end, to broaden the Autogas policy, which would, in the long run, lessen reliance on gasoline as our primary source of transportation fuel.
“Before the AKKP project, Nigeria conceptualised the Nigeria-Morroco Gas Pipeline, as an extension of the West African Gas Pipeline, which would run through some African countries with a possible linkage to the European market.
“This project was conceptualised in 2016. Outside the NLNG project, the Nigeria-Morocco Gas Pipeline project would meet the international focus even as the local expansion of LPG and CNG is also being pursued.
“Let us hope that our leaders will cautiously navigate the rough edges of the coup in the Niger Republic to forestall the risks of sabotage of this project by international state and non-state actors,” he said.
Speaking at the same time, Mr. Aaron Sayne of NGRI urged dealing with issues relating to foreign exchange and policy, investment, and access to financing for gas projects, while indigenous players should replace international oil companies.
Oluremi Komolafe, Director, Gas, Ministry of Petroleum Resources, said the ministry would remain committed to the energy transition.
Komolafe added that the NGEP was making its way towards realisation while the Compressed Natural Gas engine conversion was ongoing, noting that production would be spurred to meet demand.