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NNPC plans to boost gas production

By on May 21, 2015

Against the backdrop of inadequate domestic gas supply amid huge reserves in the country, a new plan to issue separate leases for gas assets in order to attract more investors to boost output of gas is being worked upon.

The Group Executive Director, Gas and Power, Nigerian National Petroleum Corporation, was quoted by Bloomberg as saying in an interview, “Gas, over the last few years, has become a very prominent commodity on its own, which requires a life of its own.”

According to him, the nation needs companies such as Russian exporter, OAO Gazprom, and Centrica Plc, the United Kingdom’s biggest energy supplier, to enter the market to “drive our gas agenda aggressively.”

Almost all of the nation’s reserves of 184 trillion cubic feet of gas, the world’s eight-largest, were found in the course of searching for crude oil.

The new plan seeks to provide opportunities for companies specifically exploring for gas, according to Ige.

More than 80 per cent of Nigeria’s hydrocarbon reserves are in leases held by Royal Dutch Shell Plc, Chevron Corporation, Exxon Mobil Corporation, Total SA and Eni SpA, whose priority continues to be oil, Ige said.

Nigeria currently produces about nine billion cubic feet a day of gas, half of which is exported as liquefied natural gas. While one billion cubic feet a day is flared in the course of oil production, another one billion cubic feet is re-injected into oil wells daily for pressure stability.

Almost two billion cubic feet a day is supplied to industries and power plants, where demand is estimated to more than double to five billion cubic feet a day in two years.

NiGaz Energy Co., a joint venture created in 2009 between the NNPC and Gazprom, Russia’s gas export monopoly, couldn’t get a foothold because all the acreages with significant reserves are held by other companies, including Shell, Chevron and Exxon Mobil, Ige said.

When current industry reforms are completed and a new industry law is passed, companies that “are not oil players can have access to gas, and we will begin to see more vibrant interest from players like Gazprom,” he said.

Nigeria is expanding its gas pipeline network to supply the fuel to industries and power plants in different parts of the country and create a node for a proposed trans-Saharan pipeline to Europe.

 

 

 

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