By Amechi Ogbonna, SUN newspaper
The Federal Government’s decision last year to declare the next ten years, a decade of gas revolution will indeed go down as a watershed in Nigeria’s giant strides to develop sustainable economic and infrastructural base capable of making it more competitive in an emerging global order.
For most energy industry stakeholders, including those who had followed the nation’s oil and gas growth trajectory over the years, the launch of Nigerian hydrocarbon industry into the 21st century clearly typifies the national strategic intent of the Muhammadu Buhari administration at deepening the country’s gas resources value optimisation masterplan.
The launch of the policy also came up with a blueprint for the 1st decade of the millennium known as the Nigerian Gas Master Plan (NGMP) focusing on accelerating the growth of country’s gas sector.
Explaining the inherent benefits of the NGMP, Director and Chief Executive Officer at the Department of Petroleum Resources (DPR), Mr Auwalu Sarki, observed that the Nigerian gas master plan strategically considered, reviewed and presented a comprehensive domestic gas market development roadmap that could move the nation into getting maximum value from the use of its abundant gas resources for supply of energy (power generation, transportation fuel, domestic use at homes and power for Industry) in addition to the provision of feedstock for several Industries (fertilisers, plastics, petrochemical, textile, paint industries among others.
He expressed confidence that NGMP implementation will undoubtedly impact the economy in greater dimensions to improve living standard of over 200 million Nigerians through job creation across strategic industries that will emerge from an efficient supply of energy to critical areas of service in a highly diversified economy.
While the launch represents a landmark for the regulators, it however raises for more challenges to the DPR and other stakeholders to bolster more investment in the sector.
Sarki explained that the critical elements of the plan was to support an accelerated development of Nigeria’s domestic gas sector including ensuring gas availability and affordability through the use of the domestic gas supply obligation (DSO), providing required gas infrastructural capacity across the entire gas demand points in Nigeria.
This he said will also emplace a well developed gas market where transactions can be carried out in a fully commercialised atmosphere that supports optimal returns on investments made in either gas supply, transportation or utilisation.
It then goes without much emphasis that in each component of the gas value chain listed above, lies the job creating mandate that complements the Federal Government objective of tackling its humongous unemployment and security challenges plaguing the country.
It was indeed against this backdrop that the Department of Petroleum Resources and other stakeholders in the hydrocarbon value chain have committed to implementing measures toward the execution of the gas master plan to bolster further strategic investments in the gas sector and culminating in the declaration of 2021-2030 as the decade of gas.
However, a careful overview of the global oil economy will reveal that effective development of a gas sector in every jurisdiction had been benchmarked on the mandatory provision of fundamental enablers that include availability of affordable gas, accessibility of the gas from all demand points and a secured gas market that ensures that all transactions are conducted in a fair, transparent and equitable manner.
It is also imperative to note that availability of gas will naturally be achieved through investments that licensed hydrocarbon producing companies can make in exploring and developing assets and acreages assigned them.
For Nigeria at the moment, one can conveniently say without equivocation that these investments have already secured a proven gas resource base of over 200tcf that now makes it to rank as the largest gas resource bearing nation in Africa and the 9th in the World.
This ranking, beyond proving that the country is abundantly endowed with gas resources than can be used to create extensive wealth if properly harnessed for the common benefit of all, is also an indication that the gas deposits alone can become the bedrock for further development planning.
In this regard, the Department of Petroleum Resources said it is ever ready to create more opportunities for collaboration in development of gas infrastructure.
“DPR will as always provide leadership across the entire hydrocarbon value chain through its strategic reserve and lease asset administrative roles to continuously grow the national gas reserves over the years and is now re-defining its strategic focus (through the Gas-To-People Initiatives) to enable all gas business opportunities in this Industry to create maximum economic return from the abundant gas resources for the benefit of every Nigerian.” Sarki said
With regard to Accessibility of available gas resource however, the DPR boss said the responsibility of ensuring safe and efficient transportation and distribution of produced natural gas from all hydrocarbon assets (oil & gas mining leases, oil & gas producing fields) which maybe located onshore, offshore or deep offshore to all areas where gas is required for industrial or domestic use is still not lost on it.
Consequently, Auwalu Sarki -led DPR hopes to achieve its mandate by means of safe and efficient transportation and distribution of gas through the pipelines and by virtual pipeline systems.
Pipeline systems will naturally flow natural gas from any point where it is produced to the point where gas is utilised in its various forms to create value.
So far, the Department said it has licensed over 10,000Km of pipelines for efficient delivery of gas from the licensed Oil and Gas assets in Nigeria even as it is hoping to attract more investments in the area of provision and operation of more pipelines for the delivery of natural gas in the domestic market.
According to the agency, Virtual Pipeline systems are typically deployed to supply gas to demand points where pipeline systems are not available. They are systems used for supply of natural gas including liquified Natural Gas (LNG) and compressed Natural Gas (CNG) by trucks to mitigate the infrastructural deficit being experienced in gas transportation.
Sarki further indicated that the Department of Petroleum Resources would continue to commit to ensuring accessibility of gas to all gas demand points in Nigeria through the enablement of opportunities in both the pipeline and virtual pipeline gas transportation distribution systems. The licensed capacities for this critical segment of the domestic market have continued to grow progressively in the last decade and will expand greatly in this decade of gas.”
He also noted that Affordability of gas will facilitate the development of a vibrant domestic gas sector that effectively delivers value to all economic segments in a sustainable and optimal competitive manner relative to alternative sources.
The gas master plan, relevant gas policies, regulations, programmes and initiatives governing, supporting the development of the domestic gas segment seek to ensure that natural gas is just not available but affordable to ensure that maximum economic rate is derived from the utilisation of the abundant gas resources across Nigeria.
In the meantime, the agency said that all its efforts would now continue to be exercised to ensure that gas is affordable for all Nigerians by the opportunities that the Department is enabling.
For the DPR, a matured domestic gas market remains a critical enabler that will accelerate the gains that Nigerian’s economy can make from the use of gas.
This derives from its attributes of a matured gas market that include pricing structure of gas supply / transportation driven by fundamentals of demand / supply, capacity for supply and off-take of available gas. Others are sanctity of gas contractual instruments, high gas trading transactions, strong business enablement and ease of doing business.
No doubt the Nigerian gas sector has evolved over the years from the pre-Nigerian Gas Master Plan era where it did not have much depth around a structured market to becoming a sector that will definitely have all the performance enhancement required for a vibrant domestic gas market segment.
But in all of these, credit must be given to the Department of Petroleum Resources through the focused leadership of the Minister of State Petroleum Resources, Timipre Sylva and President Muhammadu Buhari for accelerating sustainable growth and attracting Investment to the Domestic Gas Sector through optimisation of gas supply and optimal gas market performance and conducive investment environment.
Overall, the Nigerian domestic gas market can be said to be an economic sector that is clearly on a path of sustained growth across its value chain that will greatly impact the lives of all citizens positively with the Department of Petroleum Resources positioned to encourage all stakeholders to cease the outstanding opportunities that gas portends for the economic renaissance of Nigeria.
The NC is a critical enabler that shall support the attainment of the full commercialisation of domestic gas market in ways that success can be achieved for all stakeholders.
Meanwhile the DPR has continued to drive the Nigerian Gas Transportation Network code, a strategic approach deployed to catalyze the development of the domestic gas sector through reliable transportation of gas from gas producers to users of gas.
The code ensures that gas is delivered to a user of gas at any point where gas is required at the right quantity, required quality, on schedule and at an optimum cost.
Effective implementation of a network code in gas transportation shall greatly boost the performance of the entire domestic gas value chain through the efficient linkage of the supply points / sources of gas to all the demand / off-take points.
The Nigerian Gas Transportation Network code was developed through an extensive Industry wide collaboration, broad global benchmarking of best in practice / impact network code across the World (UK, Europe, USA & Egypt in Africa) and domestication of global NC practices to Nigerian market peculiarities.
The developed NGTNC was officially launched by the Minister of State Petroleum Resources, Chief Timipre Sylva on the 10th of February 20, 2020, now a Nigerian Industry historical timeline that brought Nigeria into the league of natural gas resource endowed nations that have adopted the NC as a strategic enabler of its gas value chain.
Following the successful development and launch of the code, the Department of Petroleum Resources aggressively coordinated the implementation process of the NC through extensive alignment of all players in the industry, development of procedures for the code, adaptation of critical technology enablement for the administration of the code.
The concerted enabling actions of the Department led the second key achievement in the gas sector in the year of gas which was the NC GO-LIVE on the 10th August 2020 and launch of the Network code electronic Licensing and administrative system (NCELAS) by the Minister of State for Petroleum, Chief Timipre Sylva.
The NC GO-Live opened up the opportunity for all gas requirements across Nigeria and the African sub-region to access gas from all the hydrocarbon resource bearing assets in a safe and efficient manner.
