By Chika Amanze-Nwachuku
Gas is the source of commercial energy most favoured by environmentalists, as well as being a reliable and highly efficient source of power generation. It is predicted to become the largest energy carrier from 2033. As with oil, there are enough gas resources in the world to meet demand for generations to come.
Nigeria is among the countries blessed with abundant natural gas. The country holds about 203.16tcf (trillion cubic feet) of proven gas reserves as of January 2020, according to latest figures released by the Department of petroleum Resources (DPR).
Up until now, most of Nigeria’s natural gas production has been flared or re-injected to enhance greater crude oil recovery. Not much was accomplished by successive administrations with respect to effective exploitation and utilisation of Nigeria’s abundant natural gas reserve.
There was little or no development in the domestic gas supply as efforts to ensure adequate gas supply to the domestic market to enable usage in gas to power, gas-based industries and commercial subsector were hampered due majorly to inadequate gas pipeline infrastructure in the country.
Aside from the inadequate gas pipeline infrastructure, other challenges included the huge legacy debts owed suppliers by off-takers, pipeline and infrastructure vandalisation, insecurity in the oil and gas operating areas, inadequate gas project funding, slow contracting and approval process, late customers’ on-stream date as well as unfavourable commercial framework.
Kyari’s Giant Stride in Gas
Since he took over at the helm of the Nigerian National Petroleum Corporation (NNPC) about 17 months ago, Mele kolo Kyari has put in place strategies to exploit and utilise the nation’s natural gas reserves to translate the sector to a key revenue earner.
His priority was to unlock and harness the potential of Nigeria’s gas resources to increase domestic and industrial power supply, raise living standards and support sustainable economic growth.
This is in line with President Muhammadu Buhari administration’s target to ensure adequate gas supply to the power sector, stimulate gas-based industrialisation by positioning Nigeria as African’s regional hub for gas-based industries such as fertilizer; petrochemicals; methanol and gas export to high value and strategic foreign markets.
Under Kyari’s watch, the Ajaokuta-Kaduna-Kano (AKK) pipeline, a 614km-long natural gas pipeline project is being developed by the Nigerian National Petroleum Corporation (NNPC). The AKK gas pipeline is planned to transport natural gas from Ajaokuta, in Kogi State to Kano, through several states and urban centers, as part of the Trans Nigeria Gas Pipeline.
The project, a component of the Nigerian Gas Master Plan, had been approved by the Nigeria Federal Executive Council in 2008, but was stalled owing to the inability of the contractors to progress financing.
But shortly after assuming office as the NNPC’s GMD, Kyari approved the renegotiation of the contract, resulting in further cut of $300million of the contract value.
Kyari’s resilience to deliver on the project despite the COVID-19 pandemic, brought the project on track leading to the award of the contract at a competitive price and the eventual flag off of construction in June 2020.
The AKK gas pipeline is expected to be fed from the existing domestic Infrastructure with a capacity of over 1.5 billion cubic feet, daily, Bcf/d and is being expanded by Escravos-Lagos Pipeline System II (ELPS II) and Obiafu-Obrikom 3 (OB3) gas pipeline which will double the capacity to over 3billion cubic gas per day.
Besides providing gas for power generation and gas-based industries, which will in turn facilitate the development of new industries, the hitherto moribund industries along transit towns in Kogi State, Abuja (FCT), Niger State, Kaduna State and Kano State, would be revitalized when the AKK project becomes operational as the project will inject about 2.2bscf/d of gas into the domestic.
In addition, the AKK project will support the development of petrochemicals, fertilizer, methanol and other gas-based industries that will also generate employment and result in economic growth.
ANOH Gas Projects
As part of concerted efforts to ramp up gas-to-industries and gas-to-power in the country, NNPC, under Kyari is facilitating the completion of the Asa North-Ohaji South (ANOH) gas project, one of the largest green field gas condensate development projects ever undertaken in Nigeria.
It is expected that the project will produce about 600million standard cubic feet of gas per day, an equivalent of approximately 2.4gigawatts of electricity for the country.
In a goodwill message at the 2020 South East Gas Utilization Forum in Owerri, Imo State recently, Kyari commended the imminent completion of the landmark Obiafu-Obrikom-Oben “OB3” gas pipeline project, which he said, would help commercialize over 2billion cubic feet of gas per day and generate billions in revenue as well as create thousands of employment opportunities for Nigerians.
“NNPC as an enabler organization has since realized the obvious economic importance of gas and has consistently made concerted efforts towards delivering the right infrastructure and commercial structures, in a bid to deliver value to customers and all stakeholders,” said the GMD.
The NNPC boss stated that the laudable initiative of the Gas Aggregation Company of Nigeria (GACN) aimed at facilitating the optimal use of natural gas to drive industrial and economic growth, aligns completely with President Muhammadu Buhari’s aspirations of prioritizing gas development for economic growth, power generation and the eventual industrialization of Nigeria.
Gas Devt Deal with SEEPCO
As part of efforts to promote gas production and utilization in the domestic market, the NNPC recently signed an agreement
with Sterling Exploration and Energy Production Company (SEEPCO) for the development and commercialization of gas from the Oil Mining Lease (OML) 143 that could help reduce gas flaring in the country.
The execution of the gas deal with SEEPCO was a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.
Kyari said at the signing that the deal would not only help reduce gas flaring and its environmental hazards, but would also promote gas production and utilization in the domestic market.
The GMD also commended SEEPCO for its unwavering commitment to gas development and commercialization in Nigeria, which said has led to the establishment of a Special Purpose Vehicle that will help expand gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.
Kyari Receives a Torrent of Commendation
The GMD has continued to receive a torrent of praise from across the country for his achievements in the areas of gas infrastructure development and gas supply obligations for the domestic market and exports.
SEEPCO Boss Lauds Deal
Chairman of SEEPCO, Mr. Tony Chukwueke has commended Kyari for the execution of the gas deal with SEEPCO, pointing out that it is an essential partnership that would help the company fulfill the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetizing it.
He applauded the NNPC and the GMD for ensuring the execution of the agreement which he said, was central to the achievement of the company’s cardinal objective of boosting the production of Liquefied Petroleum Gas (LPG), condensate and dry gas for the Nigerian market, adding that the company has invested about $600 million for that purpose.
FCC Boss Commends Kyari over AKK Pipeline Project
Also recently, the Executive Chairman of the Federal Character Commission (FCC), Dr. Muheeba Farida Dankaka, commended Kyari for the recent flag-off of the AKK gas pipeline project.
Dankaka said the AKK project was one that could boost the nation’s economy and wellbeing of Nigerians.
The FCC boss also noted that the recent recruitment by NNPC was transparent and ensured equal opportunity for all Nigerians, adding that the Corporation fully complied with FCC guidelines in the exercise.
GMD Receives Kudos from Lawmakers
The House of Representatives Committee on Gas Resources has also applauded the Mallam Mele Kyari-led Management team the NNPC for its enormous achievements in the areas of gas infrastructure development, gas supply obligations for the domestic market as well as the progress made on the NLNG Train 7 Project. Chairman, House Committee on Gas Resources, Hon. Nicholas Mutu, during an oversight visit to the NNPC Towers, Abuja, recently said that the committee was pleased with the ongoing drive by the Corporation to promote the use of gas as a cheaper and cleaner form of energy.
“It is a step in the right direction. Indeed, gas resources have come to take the pride of place in our national development agenda, and given the quantum of proven gas reserves in the country, we can rightly declare that Nigeria is more of a gas country,” Mutu said.
He also said the Committee was satisfied with the provisions of the Petroleum Industry Bill 2020 on gas resources development, particularly Section 52, which provides for the establishment of a Midstream Gas Infrastructure Fund.
“We acknowledge the efforts of the Management of NNPC in developing the gas sector, and we commend them on the existing projects. The AKK gas pipeline that was recently launched by Mr. President is an exhibition of total commitment by the NNPC.
“This will give Nigerians more opportunity to enjoy cheaper fuels for their vehicles as well as reduce carbon emission footprints in line with the global environmental aspirations,” he said.