The Managing Director, Shell Petroleum development Company of Nigeria, Mr. Osagie Okunbor has said that harnessing Nigeria’s vast gas resources and on time too, is key to the development of the country.
Okunbor who stated this at the 2021 Strategic International Annual Conference of the Association of Energy Correspondents of Nigeria (NAEC) with the theme: “Petroleum Industry Act: Energy Transition and The Future of Nigeria’s Oil and Gas”, held in Lagos on Tuesday noted that currently, 85 million Nigerians including the vast businesses do not have access to grid electricity adding that unlocking the challenges in the gas-to-power value chain was therefore critical to improve access to energy for Nigerians.
“We know that there are several challenges that we need to overcome as a country in order to successfully build resilience and grow the domestic gas market”
Represented by Mr. Ed Ubong, the MD observed that natural gas gave Nigeria the ability to lift millions of people out of poverty, giving them the power to improve their physical health, wellbeing and standard of living noting that it also gave the country a pathway to economic growth and development not only through direct exploration and trading of gas but by providing reliable power supply for the manufacturing and industrial sectors which he said were the major growth engines for developing economies.
He went ahead to disclose that the federal government of Nigeria had made it an economic priority to harness the potential of its resources to bring power and prosperity to its people.
According to him, “This priority includes the plans to develop the gas sector to drive the domestic economy and to drive export as the energy transition demands increased supply of fuels like natural gas. Natural gas emits between 45% and 55% fewer greenhouse gas emissions and less than one-tenth of the air pollutants than coal when used to generate electricity.
“To achieve this, the federal government had declared 2020 as ‘The Year of Gas’ in Nigeria and it launched two flagship projects (AKK and ELPS 2) to increase gas supply infrastructure in the country. It also declared the Decade of Gas in 2021 to 2030 with specific projects targeted. The success of these projects is, however, hinged on so many factors: sanctity of existing contracts, predictable regulatory, commercial and legal framework across the country and improved security and safety. These are all success enablers for these projects.”
The MD maintained that the effective utilization of available gas and building of a resilient domestic gas industry would require partnerships between the Nigerian government and oil and gas companies that could innovate, capacity to deliver major projects and willingness to take on long-term commitments.
“For example, we know that there are several challenges that we need to overcome as a country in order to successfully build resilience and grow the domestic gas market. These include the need to accelerate gas sector development across seven thematic areas: unlocking the domestic gas-to-power value chain, accelerating infrastructure development plus virtual pipelines, driving gas based industrialization, deepening domestic LPG penetration, building a stable regulatory environment anchored on a willing buyer-willing seller pricing regime, growing the export and regional gas market and building local capacity/content for contractors and professionals in the gas sector.
“These seven thematic areas are critical to realizing the objectives of the ‘Decade of Gas’ and they need to be pulled together in a Nigeria Decade of Gas Master plan (NDGMP) that provides a roadmap that allows Nigeria to utilize its huge gas resources for its socio-economic development”, he said.
Okunbor further informed that with Covid-19, the country had seen a slowdown in the industry and in the ability to deliver projects not only due to the direct impacts of the virus on the local economy but because the shutdown of the global economy had affected the industry pointing out that this was due to the industry’s supply chain’s heavy reliance on imports.
He added that post Covid-19, there was a need to work on building capacity in country to enable local industries enter the supply chain and participate more aggressively saying that Nigeria needed to reduce the industry’s reliance on imports and create new markets in country.
“At Shell, we recognize that local content is key to surviving a post Covid pandemic world and Shell will continue to invest in this space. We remain committed to building capacity and competence in country to enable more Nigerians participate directly and indirectly in the gas value chain and pump more money into the local economy by supporting Nigerian companies.
“Shell assists Nigerian companies to achieve the necessary certification for their products and services to ensure that they qualify for tenders and contracts to provide goods and services across its operations and the Nigerian oil and gas sector. In 2020, 100% of SCiN contracts worth $800 million were awarded to Nigerian companies. SCiN have also provided access to nearly $1.5 billion in loans to 764 Nigerian vendors under the Shell Contractor Support Fund since 2012. These loans help improve tendering opportunities”, he submitted.
On Decade of Gas, the SPDC boss explained that “To help Nigeria achieve the objectives of the Decade of Gas, The Shell petroleum Development Company of Nigeria Limited (SPDC JV) is working with the federal government and Nigerian National Petroleum Corporation (NNPC) on developing four of the government’s seven critical gas supply projects.”
“One of these projects is the Assa North/Ohaji South Gas Development Project in Imo State where construction began in 2019. The project, with a capacity for 300 million standard cubic feet of gas per day, has the potential to be one of the largest domestic gas projects in Nigeria when completed. The development aims to help the federal government deliver on its ambition to provide gas for domestic consumption, power generation and gas based ammonia and urea fertilizers for farmers.
“The other three projects are in early stages and investment decisions have not been taken. However, if all four projects were completed, together they might be expected to deliver more than three billion standard cubic feet of gas per day for domestic use and export”, he added.
SOURCE: primetimereporters.com
