Editor’s note: Nigeria is not an oil, but rather a gas country, the Naij.com columnist Japheth Omojuwa and his co-author Ahmed Abubakar say. To ensure progress, the President Buhari-led administration must provide enabling environment to implement the gas to power technology and make the gas industry attractive for investors.
The views expressed in this article are those of the author(s) and do not necessarily represent the editorial policy of Naij.com.
Story highlights:
— “In reality, Nigeria is more of a gas country than it is an oil country. We have far more gas reserves than oil”
— What are the options before Nigeria?
— “We need a viable commercial framework that would make investment in the industry attractive”
Industry experts have said that gas is able to get Nigeria out of its ‘power quagmire’. Nigeria has proved gas reserves of about 5.153 trillion cubic meters. It is one of the highest proven reserves in the world and the highest on the continent. In reality, Nigeria is more of a gas country than it is an oil country. We have far more gas reserves than oil. This clearly shows that the primary challenge Nigeria is to face around gas exploration and a gas-to-power agenda will not be about sourcing the raw material, but mostly about the enabling laws and the infrastructure.
Nigeria currently operates a subsidy regime for the downstream sector, which simply makes the industry an unattractive prospect for investors. No investor would fund an industry where the government dictates prices.
There is one fundamental reality that must change if Nigeria is to use its vast gas reserves to power homes and industries. The market must open up by making sure to do away with the fuel subsidies, and full liberalization of the sector and the institution of global best practices on the operations of the sector introduced. When this is done, the road to power Nigeria through gas will start.
The challenges for gas exploration in Nigeria may be daunting but not insurmountable. Let us look at gas exploration itself. A layer of natural gas is sometimes encountered before crude oil is extracted from the ground. Most of this is currently flared, costingNigeria some $2.5 billion in wasted gas. At its natural state, gas is filled with impurities which can freeze, such as hydrogen sulfide, carbon dioxide and water amongst others, and need to be removed before the gas is eventually liquefied. The flared natural gas that is supposed to be processed and liquefied usually causes various kinds of environmental and health issues in the short to long terms. Liquefied natural gas (LNG) is made when natural gas is kept frozen at -162 degrees Celsius.
LNG is typically made of methane gas with traces of ethane, nitrogen, and propane. When gas is liquefied, it holds a quantitative advantage: it would take about 600 ships to transport the contents of one LNG ship. LNG is quite safe and non-corrosive, and even when it spills, it simply evaporates into the air.
LNG is also the most environmentally-friendly fossil fuel because its CO2 emission is one of the lowest.
What are the options before Nigeria? Gas pipelines are not the way forward in the short or near-long term for certain reasons. Apart from cost-related issues, there is the security risk of running a long gas pipeline that could be vandalised in states it cuts across. Security is a pressing issue in Nigeria. However, the liquefied natural gas stored in tanks can be used to feed the gas power plants. The gas power plants can be used to generate electricity for targeted areas.
Pipelines can be replaced by cryogenic tankers to distribute LNG to the various storage tanks across the nation.
This system of LNG storage tanks and gas power plants can be used to boost energy supply in short-medium term. Once the market is guaranteed and insecurity dealt with to its barest minimum, we can look at laying gas pipelines, but in line with commercial interests. Pipelines should be built according to the dictates of the market and not according to political considerations.
The primary inhibition against this development is the absence of an enabling environment. It is always going to be difficult to attract investors into the industry if the government intends to be a player and a regulator. We have not really started to explore the possibility of using gas specifically to power the country. While we continue to suffer the consequences of a country that cannot power its industries, we do have the essential raw material to power Nigeria.
The process of opening up opportunities in gas exploration and gas-to-power projects will create numerous jobs, and you already know that, once Nigeria fixes its power challenge, our industries will produce more, employ and empower more people to participate in the economy. This policy could also help reduce gas flaring because energy companies would be able to sell the gas to processing companies.
Even after pipeline construction, the LNG storage tanks could be used for emergency situations and efficiency improvement.
We need a viable commercial framework that would make investment in the industry attractive. There are currently little or no incentives for private investors to put money into the industry.
President Buhari administration has its work cut out, but if it is brave enough to take certain decisions, Nigeria will win on many fronts: developing the gas sector, empowering private investors with new laws, opening up the investment space for gas-to-power generation. Expect new industrial parks, more export processing zones and an increase in manufacturing that would help power Nigeria’s renewed quest for true and sustainable industrialization.
Japheth Omojuwa (left), Ahmed Abubakar for Naij.com
Japheth Omojuwa is a renowned Nigerian social media expert, columnist and Naij.com contributor. His co-columnist Ahmed Abubakar is a doctoral candidate in Network and Cyber Security at Loughborough University, passionate about public sector reforms, national security and the Nigerian energy sector.
READ MORE: http://www.naij.com/473710-omojuwa-ahmed-abubakar-gas-to-power-technology-is-effective.html
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