Energy
Steps to Achieve ‘The Decade of Gas’
Article By: Elvis Eromosele
Nigeria is a study in contradiction. It has the largest proven gas reserve in Africa yet faces a significant challenge in providing access to gas for a majority of its citizens and businesses.
On top of this, it occupies an unenviable position as one of the top seven gas-flaring countries in the world, according to the World Bank. The tale would be unbelievable if it was fiction.
Sadly, the reality is grim. Oil-producing companies burn off millions of cubic litres of natural gas during oil production.
They use a fancy term, gas flaring, to describe it. It doesn’t however take remove from the fact that the action, gas flaring, is a glaring waste of a wasting resource. It also impacts negatively on the environment, human health and the cost of gas. It needs to be stopped.
Over the last couple of years, governments have sought to curtail incidents of gas flaring, increase the use of gas and boost revenue from it, all with varying degrees of success.
To highlight the commitment of the federal government to boost the domestic use of gas among Nigerians as the primary energy source President Muhammadu Buhari declared the ‘Decade of Gas’ (January 1, 2021, to 2030). An integral part of the process is the development of gas infrastructure, with the construction of the 614km Ajaokuta-Kaduna-Kano gas pipeline the number one starting point.
The goal is simple, to increase the domestic utilisation of LPG and CNG, commercialise gas flares, develop industrial gas markets and increase gas-to-power. Related policies which are already in the works include the National Gas Expansion Programme and the Autogas policy.
Experts argue, however, that despite the government’s best efforts to increase the distribution of liquified petroleum gas (LPG), also known as cooking gas, a large number of Nigerians still rely on firewood and charcoal for cooking with the attendant damage to the environment and impact on the climate.
Now one of the main reasons for this is the lack of infrastructure and distribution networks for LPG. Many areas in the country do not have access to gas pipelines, making it difficult for residents to obtain cooking gas.
We’ll require a study to explore the risk associated with the current gas tank retail marketing method. Additionally, the cost of LPG is prohibitively high for low-income households, who make up the bulk of the population.
Figures from the National Bureau of Statistics (NBS) show how deep the poverty is – 63 per cent of persons living in Nigeria (133 million people) are multidimensionally poor. It’s a grim picture.
GlobalData reports that by flaring, rather than utilising gas for power generation or other domestic needs, Nigeria and other nations involved in such acts, could lose up to $82 billion a year globally. Other countries in this unholy group include Algeria, Angola, Indonesia, Iran, Iraq, Libya, Malaysia, Mexico, Russia, the US and Venezuela. They accounted for over 87 per cent of all flared gas in 2020.
Independent sources reveal that Nigeria flared an average of 11.1m3/bbl of gas in 2021. The issue here is that the Nigeria Gas Flare Commercialisation Programme (NGFCP), which seeks to curb the act, has loopholes along with low and weakly enforced penalties. It needs to be tightened and strengthened to make it more effective.
Nigeria had 208.62 trillion cubic feet (TCF) of gas reserve as of January 2022, according to the Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, an engineer. However, the development of gas, especially for domestic use, is still relatively low.
The price is still in the skies for many potential users. Right now, the concern is that with the rising cost of cooking gas, the domestic utilisation of LPG may decline. It remains to be seen how this will impact the achievement of the ‘Decade of Gas’ objectives.
There are several steps that the government can take to increase access to cooking gas for Nigerians. As a concerned citizen and cooking gas user, here are my thoughts on five things that the government can do to improve access to natural gas:
Firstly, the government must invest in building pipelines and distribution networks to reach residential and business areas and improve access to LPG.
Secondly, while the country has significant natural gas reserves a lack of investment in the sector has led to low production of LPG. It is time for the government to encourage investment in the sector to increase domestic production and thus curb the importation of LPG.
In addition, to demonstrate the resolve to improve the use of gas among citizens, the government can look at providing subsidies for LPG to make it more affordable for low-income households. This will make it more accessible to those who currently are unable to afford it.
Furthermore, since reports indicate that Nigerians are unaware of the benefits of using LPG as a cooking fuel, the government can launch a campaign to educate citizens on the benefits of LPG and how to safely use it.
Finally, the government must create an enabling environment to encourage private sector participation and investment in the LPG industry. This will increase the availability of LPG and possibly help drive down prices.
With the implementation of these measures, Nigeria can truly increase access to cooking gas for a majority of its citizens and reduce the country’s dependence on firewood and charcoal. This will not only improve the quality of life for citizens, but it will also help the environment by reducing deforestation and air pollution caused by the burning of firewood.
Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.
Energy
AVEVA is providing data management support for renewable natural gas projects
Reporter: Godwin Ezeh
Key Highlights
● AVEVA’s industrial information infrastructure has been selected by Archaea Energy to provide key data management support
● AVEVA’s industrial software to optimize performance across Archaea’s RNG plants
AVEVA, a global leader in industrial software driving digital transformation and sustainability, has been selected by Archaea Energy, the largest renewable natural gas (RNG) producer in the US, to build a comprehensive operations data management infrastructure.
Using AVEVA’s software, Archaea Energy can collect, enrich and visualize its real-time operations data, enabling performance analysis across its growing network of plants.
Using AVEVA PI Data Infrastructure, a hybrid solution with cloud data services, the plants will be able to share data to highlight operational opportunities and optimize efficiency.
Caspar Herzberg, CEO, AVEVA, stated,
“Through this collaboration and the use of AVEVA PI Data Infrastructure, Archaea’s growing network of plants will have streamlined operations with accurate performance analysis throughout the expansion. AVEVA’s CONNECT software platform leverages industrial intelligence from a central location, making it easier to deploy additional digital solutions in the future.”
“As the largest RNG producer in the United States, we are dedicated to delivering reliable, clean energy,” said Starlee Sykes, chief executive officer of Archaea Energy. “This relationship will allow us to optimize operations and offer detailed performance analysis as we continue to expand across the country.”
…OML 13 Asset Eyes 80,000 bpd by End of 2025
In a major boost for Nigeria’s crude oil production, revenue generation and economic growth efforts, the NNPC Ltd has officially unveiled its latest crude oil grade, the Utapate crude oil blend, before the international crude oil market.
It would be recalled that in July, 2024, NNPC Ltd and its partner, the Sterling Oil Exploration & Energy Production Company (SEEPCO) Ltd introduced the Utapate crude oil blend, following the lifting of first cargo of 950,000 barrels which headed for Spain.
During a ceremony held at the Argus European Crude Conference taking place in London, United Kingdom, on Wednesday, the Managing Director, NNPC E & P Limited (NEPL), Mr. Nicholas Foucart described the introduction of the Utapate crude oil blend into the market as a significant milestone for Nigeria’s crude oil export to the global energy market.
“Since we started producing the Utapate Field in May 2024, we have rapidly ramped up production to 40,000 barrels per day (bpd) with minimum downtime. So far, we have exported five cargoes, largely to Spain and the East Coast of the United States; while two more additional cargoes have been secured for November and December 2024, representing a significant boost to Nigeria’s crude oil export to the global market,” Foucart told a packed audience of European crude oil marketers.
He added that since its introduction into the global market, the Utapate crude oil blend has enjoyed a positive response from the international crude oil market, due to its highly attractive qualities.
Foucart said the Oil Mining Lease (OML) 13, fully operated by NEPL and Natural Oilfield Services Ltd (NOSL), a subsidiary of SEEPCO Ltd, boasts a huge reserves of 330million barrels of crude oil reserves, 45 million barrels of condensate and 3.5 tcf of gas.
“We have a number of ongoing projects to increase our production from the current 40,000bopd to 50,000bopd by January 2025 and 60,000bopd to 65,000bopd by June 2025. Essentially, we are targeting opportunities to increase production to 80,000bopd by the end of 2025,” Foucart added.
He said the Utapate crude oil terminal is sustainable, affordable and fully compliant with the rigorous environmental regulations and sustainability principles especially those aimed at reducing carbon emissions and other ecological effects.
Also speaking, the Managing Director of NNPC Trading Ltd (NTL), Mr. Lawal Sade said the pricing structure of the Utapate crude oil blend is similar to that of Amenam crude as it is a light sweet crude which is highly sought after by refiners across the world due to its low sulphur content, efficient yield of high-value products, API gravity and other similarities.
He said in bringing the new crude oil blend to the global market, NNPC Ltd wanted to optimise value for both its producers and counterparties across the globe.
He added to ensure predictability and sustainability of supply, the NNPC Trading intends to run a term contract on the Utapate crude oil blend cargoes, principally targeting off-takers from the European and the US East Coast refineries.
Produced from the Utapate field in OML 13 in Akwa Ibom State in Nigeria, the Utapate crude oil blend is similar to the Nembe crude oil grade. It has a low sulphur content of 0.0655% and low carbon footprint due to flare gas elimination, fitting perfectly into the required specification of major buyers in Europe.
The NNPC E&P Ltd and NOSL partnership is also committed to operating in a manner that is safe, environmentally responsible, and beneficial to the local communities.
The Utapate field development plan, executed between 2013-2019 and approved in October, included converting wells and facilities from swamp/marine to land-based operations.
The plan involved a multi-rig drilling campaign for 40 wells and the development of significant infrastructure such as production facilities, storage tank, a subsea pipeline and an offshore loading platform to facilitate crude oil evacuation and loading.
The entry of the Utapate crude oil blend into the market is coming barely a year after the NNPC Ltd announced the launch of Nembe crude oil, produced by the NNPC/Aiteo operated Oil Mining Lease (OML) 29 Joint Venture (JV).
This remarkable achievement signals the commitment of the NNPC Ltd to increasing Nigeria’s crude oil production and growing its reserves through the development of new assets.
Energy
NNPC Ltd Set to Supply 100mmscf/d Gas to Dangote Refinery
…10-year Deal to Boost Local Production, Revamp Industrial Growth, reports Ikenna Oluka
The NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, has successfully executed a Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE.
The agreement, signed by the Managing Director, NGML, Barr. Justin Ezeala and the President/CEO of the Dangote Group, Aliko Dangote on Tuesday at the Corporate Head Office of Dangote in Falomo, Lagos State, outlines the supply of natural gas for power generation and feedstock at the Dangote Refinery, in Ibeju-Lekki, Lagos State.
This major milestone is in line with President Bola Ahmed Tinubu’s policy of utilizing Nigeria’s abundant gas resources towards revamping the nation’s industrial growth and kickstarting its economic prosperity.
This development, which sees a huge investment of this nature penned with zero capital expenditure (CAPEX) outlay, has been described by many as unprecedented in the history of NGML or any gas Local Distribution Company (LDC) in the country.
Under the terms of the agreement, NGML will supply 100 million standard cubic feet per day (MMSCF/D), 50MMSCF/D being firm supply and the rest 50MMSCF/D interruptible natural gas supply to the refinery for an initial period of 10 years, with options for renewal and growth.
This collaboration is a significant step toward ensuring the operational success of the Dangote Refinery and enhancing Nigeria’s domestic gas utilization.
NNPC Ltd, through NGML, its gas marketing subsidiary, continues to lead efforts in promoting the use of domestic gas to support industries and businesses nationwide.
The agreement represents a milestone for both NNPC Ltd and Dangote Refinery, aligning with their shared commitment to boosting local production and providing vital products for the benefit of all Nigerians.
It is also a further proof of NGML’s unwavering commitment to business excellence and fulfilling NNPC Ltd’s core mandate of ensuring Nigeria’s energy security through the execution of strategic gas projects across the country.
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