Exploit gas reserves to diversify economy, stakeholders tell govt

Stakeholders have raised alarm over the non-utilisation of the 188 Trillion Cubic Feet (TCF) of Nigeria’s gas reserves, with a large portion of it regarded ‘stranded’.

Stranded gas is essentially commodity is wasted or unused. Estimates of remote or stranded gas reserves range from 40 to 60 per cent of the world’s proven gas reserves.

Specifically, the stakeholders called on the Federal Government to work towards replacing crude oil with gas resources as part of the strategies to diversify the economy.

The industry operators, who gathered at the 16th yearly general meeting of the Nigeria Gas Association on Wednesday, believed that the creative administration of cutting-edge technology, integrated development and application of natural gas infrastructure would be key enablers for Nigeria’s gas industry to realise its full potential.

According to them, it becomes necessary and appropriate for Nigeria to put in place these infrastructure as to develop its vast stranded natural gas reserves to serve the economy, strengthen regional cooperation, and meet expanding demand in the world market.

Speaking on “Harnessing and Monetising the Potential of Stranded Gas Fields: A Key Enabler for Economic and National Growth”, Deputy Director, Gas Monitoring and Regulation, Department of Petroleum Resources (DPR), Engr. Antigha Ekaluo, said that out of the country’s 188TCF of gas reserves, some volumes were stranded.

He disclosed that Nigeria’s gas reserves endowment may be up to 600tcf due to the high proportion of natural gas in the Niger Delta as well as substantial discoveries made in the deep offshore area.

Ekaluo added that Nigeria is currently punching below its weight as the number one gas producer in Africa and seventh in the world, as its huge gas resources continue to remain mostly dormant.

According to Akaluo, similar to oil, the sector aspires to grow the gas resource base aggressively to catalyze growth of the wider national economy

He pointed out the while vast opportunities and high rewards for the development of the industry abound, threats also exist, nonetheless plans are in place to transform these threats into opportunities.

Dwelling on the way forward, he called for the need to facilitate competitive fiscal terms/pricing for gas; facilitate third party access to stranded gas; adopt new technologies geared towards harnessing stranded gas; and deepen market penetration and sustain demand growth.

Others according to him, is to vigorously pursue the completion of gas gathering/utilisation project; pursue alternative funding model for gas infrastructure projects and address gaps in regulatory and commercial framework across the gas value chain.

Former President of the association, Chima Ibeneche, said that the United States which used to be a leading importer of Nigeria’s oil is now approaching self-sufficiency.

Ibeneche added that the consequence is that Nigeria has a decrease in the market demand for our sweet light crude. “Couple with this is the global softening in oil prices with no immediate sign of recovery to the $100 per barrel world. As this reality sinks in, the relative importance of natural gas to the Nigerian economy has increased”, he added.

He disclosed that the revenues from the export of gas has become more significant as receipts from oil” have declined. “The demand gap for gas created by the by the electricity generation sector should be good for stranded gas, though it will require stabilising the recent transformation and privatisation of the electricity sector.

“Additionally there are potential markets for gas in transportation and also in domestic heating and cooling. All these indicate a huge potential market for gas in Nigeria.

“They indeed indicate that gas is certainly complementary to oil in driving Nigeria’s economy; but the potential for major growth and direct impact on the economy is far greater for gas than for oil”.