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Nigeria facing worrisome energy crisis – FG

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Uche Usim, Abuja

Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, on Monday, said there was an urgent need to evolve a sound industry blueprint to energy crisis the country currently faces.

Speaking at the 11th Nigerian Gas Association (NGA) conference and exhibition in Abuja, Kachikwu, who was represented by his Senior Technical Adviser  on Upstream and Gas, Mr. Gbite Adeniji, said the country needed to quickly weaned from over-reliance on crude oil and gas to other sources of income since the value of crude has been predicted to crash as from 2030.

Said he, “Nigeria is going through full-blown energy crisis despite abundant gas resources.

“Secondly, there is much more constrained international environmental mounting on the new LNG suppliers coming on stream globally. Consequently, Nigeria is competing for investments in East and Southern Africa. Prices of oil are forecast to fall after 2030 and stay low for a long time, after that, with a possibility of absolute fall in the demand for oil and a related impact on the price of gas.

“There is a domestic challenge of security on supply risks. Based on these headwinds, Nigeria has a challenging future and must therefore broaden its economy beyond oil and gas”, he said.

Also speaking at the event, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru said the national oil company, has in the last eight years, completed and commissioned over 500 km of gas pipelines which are now delivering gas to various power plants and industries.

According to Baru, “Some of the completed pipelines include the Oben-Geregu (196 km), Escravos-Warri-Oben (110 km), Emuren-Itoki (50 km), Itoki-Olorunshogo (31 km), Imo River-Alaoji (24 km) and Ukanafun-Calabar pipeline (128 km).

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“Gas creates linkages with other sectors of the economy such as agriculture, industry and power.

“Gas penetration is key to enhancing industrial growth of the transit towns and villages.

“A classical example in Nigeria is the Escravos to Lagos gas Pipeline System (ELPS). This gas pipeline is responsible for the proliferation of power plants, gas based industries, cement companies, fertiliser plants to mention a few clustered around the pipeline system.

“It then means that expansion of gas pipeline can influence economic growth and serve as a catalyst for Nation building”, he noted.

Baru also said Nigeria has seven critical gas development projects, which include – the 4.3 trillion cubic feet (Tcf) Assa North/Ohaji South field; the 6.4 Tcf Unitized Gas fields (Samabri-Biseni, Akri-Oguta, Ubie-Oshi and Afuo-Ogbainbri), the 7 Tcf NPDC’s OML 26, 30 and 42, the 2.2 Tcf Shell Petroleum Development Company (SPDC) JV Gas Supply to Brass Fertilizer Company, the cluster development of 5Tcf in OML 13 to support the expansion of Frontier E & P Uquo Gas Plant; and the cluster development of 10 Tcf Okpokunou/Tuomo West  in OMLs 35 and 62).

Baru continued, “These projects are expected to deliver about 3.4 billion standard cubic feet of gas per day (bscfd) to bridge the foreseen medium term supply gap by 2020 on an accelerated basis.

“These projects would not only bridge the projected shortfall in supply upon completion, but would also signal the beginning of the process of closing demand-supply gap in the domestic gas market.

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“It is important to reiterate that we cannot achieve our collective growth aspiration without gas”, he added.

In his remarks at the event, the Chairman of Council  NGA, Dada Thomas, said Nigeria, with its 200 million people, has been forecast to grow to 410 million by 2050 and as such must accelerate the use of gas to power its economy and nation.

“This is indeed the thrust of the Gas Policy approved in June 2017 which aims for Nigeria to be an attractive gas-based industrial nation, giving primary attention to meeting local gas demand requirements, and developing a significant presence in international markets” and  “To move Nigeria from a crude oil export-based economy to an attractive oil and gas-based industrial economy,” Thomas  said.

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