Tuesday, December 6, 2022

AEW 2022: Petroleum Ministry Clinches Gas Monetisation Devt Award 

AEW 2022

The Ministry of Petroleum Resources under the supervision of the Minister of State for Petroleum Resources, Chief Timipre Sylva has been awarded the Gas Monetisation Development Award of the Year at the African Energy award night.

The award, was presented at the ongoing 2022 edition of African Energy Week (AEW) which officially kicked off on October 18, 2022, in Cape Town, South Africa, themed ‘Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment’. 

The award was premised on the Federal Government’s ‘Decade of Gas’ Development Initiative in Nigeria. 

The award was received on behalf of the minister by his acting chief of staff/governor of OPEC for Nigeria and special adviser, international energy relations, Dr. Adedapo Odulaja.

He was accompanied on the stage by the technical adviser (TA) on gas business and policy implementation to Sylva, Dr. Justice Derefaka, alongside the executive secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote, NNPC Group Executive Director (GED) Downstream, Adetunji Adeyemi and others.

Last year (March 29, 2021), President Muhammadu Buhari, alongside Vice President Yemi Osinbajo and Sylva featured in the ‘Decade of Gas’ conference and high-level networking session in Abuja. 

Nigeria’s ‘Decade of Gas’ initiative succeeds the 2020 ‘Year of Gas’ declaration, which played a forerunner to the decade-long ambition and saw the government unveil a range of projects, including the 614km-long Ajaokuta-Kaduna-Kano (AKK) pipeline at $2.8 billion to connect the eastern, western and northern regions of the country, and the construction of $10 billion LNG Train 7. Other aspects of the project include policy changes such as gas flare commercialisation and the codification of the Nigerian gas transportation network.  

The event, themed ‘Towards a Gas-powered Economy by 2030’ also served as the formal launch of the Federal Government’s initiative to declare January 1, 2021, to December 31, 2030, as “the Decade of Gas Development for Nigeria”, a period the government aspires to industrialise the country using gas as an enabler. Following this declaration, the government and operators have demonstrated a new resolve to do things differently.

“Actualising the dream of transforming Nigeria with her massive natural gas resources requires the collaboration of government with the necessary stakeholders – the international oil companies, the indigenous oil companies and financial companies – to fully utilise our gas resources to uplift our economy,” said President Buhari at the launch and declaration of the FG’s decade of gas initiative, highlighting the importance of gas industry for significant revenue generation, in addition to over tens of thousands of job opportunities for Nigerians up to 2030.

Last year at the launch of the initiative, Sylva said: “It is no longer acceptable that despite the country’s vast natural gas resources the gap between electricity supply and demand is huge. We must deal with the energy poverty in this country. We must find a way to unlock the natural gas potential of this great nation and drag over 120 million people out of energy poverty”. 

Gas is a source of energy, gas is transport in vehicles, petrochemical in feedstock, power in manufacturing and industry, food through fertiliser and, now, the central plank in the world’s seventh most populous nation and a pillar member of the Gas Exporting Countries Forum (GECF), Nigeria, as it transforms its energy landscape to run entirely on natural gas. 

Nigeria is blessed with abundant reserves of both associated and non-associated gas, estimated to be over 208 trillion (standard) cubic feet (tcf). However, geologists believe that there is a lot more gas to be found in Nigeria, potentially up to 600 tcf, if oil and gas companies deliberately explore for gas, as opposed to finding it accidentally while in search of oil. 

Proving the 600 tcf reserves will move Nigeria to fourth position in the world from her current place as the ninth largest natural gas reserve-holder in the world. The country is the largest oil and gas producer in Africa and the sixth-largest supplier globally of liquefied natural gas (LNG) in the world. Nigeria is a member of both the Gas Exporting Countries Forum (GECF) and OPEC. 

As the decade of gas initiative looks promising and succinct, many now believe that Nigeria’s largely untapped, natural gas resources could provide the means for the country to fund its way through the global energy transition. And one of the country’s major efforts is the Ajaokuta–Kaduna–Kano (AKK) 614km-long natural gas pipeline set for completion in 2023. It will feature a diameter of 40in and is expected to transport 3,500 million metric standard cubic feet per day (mmscfd) of dehydrated wet gas from several gas-gathering projects located in southern Nigeria. 

The AKK project will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria. It also aims to create a steady and guaranteed gas supply network between the northern and southern parts of Nigeria by utilising the country’s widely available gas resources.

In addition, the development is expected to reduce the large volume of gas flared annually in Nigeria, as well as the subsequent environmental impact. The pipeline is slated to originate from Ajaokuta, through Abuja and Kaduna, before ending at a terminal gas station in Kano.

The project will be executed in three phases, with ‘phase one’ covering the construction of a 200km-long segment between Ajaokuta and Abuja terminal gas station at a cost of $855m. ‘Phase 2’ will comprise a 193km-long section to be built between Abuja and Kaduna at a cost of approximately $835m. Phase three will involve the construction of a 221km-long section between the Kaduna terminal gas station (TGS) and Kano TGS. This section will cost an estimated $1.2bn to complete.

Other infrastructure planned for the development includes various associated valve stations, as well as intermediate and terminal facilities. The natural gas pipeline is expected to require the laying of approximately 51,200 steel line 40in-diameter pipes featuring a total combined weight of 240,768t. Furthermore, the project will utilise 24in-diameter steel line pipes for spur lines, as well as 40in-diameter line break valves and future tie-in valves. 

The AKK project is spearheaded by the government and funded by China’s Belt and Road Initiative. The government hopes it will connect the country’s gas supply to other planned trans-regional and intercontinental pipelines, such as the Trans-Saharan Gas Pipeline, to open up access to Europe.  

Additionally, one of Nigeria’s current biggest gas deals, the Nigeria LNG ‘Train 7’ project has a five-year completion schedule already clearly mapped out. The project will provide direct employment to 12,000 people and indirect employment to over 40,000 Nigerians. Local vendors and contractors would be taken to task to provide the materials required.

Recall also that in the ‘Decade of Gas’ work plan, about 10 projects have been identified to address the supply side of natural gas and power challenge. The work plan has also looked at the demand side of natural gas in Nigeria both domestic and export, the supply side, the infrastructure side, as well as the commercial or economic framework needed to address all the problems and specific things needed to be done to address them.

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