Victor Ezeja
AdminAgainst the backdrop of the scarcity of cooking gas in Nigeria which has caused a steep hike in the price of the commodity, the Federal Government on Thursday expressed its resolve to come up with the right tariff that would enable the country to move towards non-associated gas exploitation.
The Nigeria LNG Limited, had earlier this month, disclosed that its productivity was down by almost 50 per cent oil production. It was recently reported that terminal owners increased prices of Liquefied Natural Gas (LNG) or cooking gas by 60 per cent in the month of October alone with a metric ton of cooking gas being sold to gas retailers at N800,000.
READ ALSO: Nigeria’s Gas Industry In Crisis As Drilling Costs Skyrocket To $30m, Operators Warn
The Vice President, Kashim Shettima, while speaking at the 6th Value Chain Annual Lecture and Awards in Abuja, however, stated that the $5 billion that Nigeria earns from gas is too low, particularly when compared to what Egypt earns from the same commodity despite having a far lower gas reserves.
He stressed that the impact of truly exploiting Nigeria’s gas reserves could not be overstated, as gas was critical to the nation’s power supply, not only accounting for 80 per cent of power generation but is expected to be the dominant power generation source by the end of this decade.
The Vice President, who was represented by the Special Adviser to the President on Energy and Power Infrastructure, Office of the Vice President, Sodiq Wanka, pointed out that the country has over 200 trillion cubic feet of untapped gas resources and ranks 9th globally in terms of proven reserves.
His words: “Today, Nigeria earns around $5 billion from gas production, a figure that is 40 per cent less than in Egypt, which has around 30 per cent of Nigeria’s reserves.
“Our production-to-reserve ratio is less than a third of Egypt’s, less than a quarter of Algeria’s, and around 10 per cent of Malaysia’s. In the aftermath of the Russia-Ukraine war, the EU and many other nations were shopping for Liquefied Natural Gas at the same time that Nigeria’s largest LNG assets were operating significantly below capacity because gas supply was inadequate.
“At this rate, according to the Decade of Gas analysis, we could have a demand-supply gap of up to 10bscfd (billion standard cubic feet per day) of gas by 2030.”
While stating that the importance of critical gas transport infrastructure, processing facilities and other midstream infrastructure could not be overstated, Shettima said: “One only needs to look at the number of power plants and factories that have built up around the Escravos-Lagos-Pipeline System and its various spurs. Today, I am glad to learn that the AKK pipeline is nearing completion.”
According to him, “In terms of upstream gas, the commitment of the government in ensuring the right tariffs to encourage exploitation of non-associated gas remains strong.
“The government will also not rest in continuing to pursue a holistic approach to the issue of security of petroleum assets – from strengthening the operationalisation of the Host Communities Trust Fund to closer community engagement, surveillance and prosecution of identified vandals.”
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
Follow Us