With over 209.5 trillion cubic feet (tcf) of proven reserves valued at more than $800 trillion, ranking Nigeria as the largest gas reserves in Africa and ninth in the world, gas usage offers a cleaner-burning fuel compared to coal and oil, making it an attractive option for addressing environmental concerns and reducing carbon emissions.
Surprisingly, despite these huge reserves, Nigeria harnesses only about eight billion standard cubic feet per day (bscf) of gas, and most of it is sent to the export market.
Analysts have said that positioning energy needs to embrace gas derivatives – Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) – transition from fossil fuel to renewable energy will help mitigate the current global energy crises. This is more so as CNG and LPG are better alternative fuels compared to petrol and diesel.
Nigeria’s abundant gas reserves present significant economic opportunities. Without a doubt, the development of a robust gas industry attracts investments, creates jobs, stimulates economic growth as well as fosters technological advancements, research and development and innovation in the gas sector.
Stakeholders have unanimously agreed that several benefits abound in switching to Autogas and gas-power. It will aid energy diversification. Nigeria is rich in natural gas reserves, and leveraging this resource provides a valuable opportunity for energy diversification. Currently, the country relies heavily on oil as our primary source of revenue and energy. By embracing gas, the country can diversify its energy mix, reduce its dependence on a single commodity and enhance energy security.
Speaking on this, Mr. Felix Ekundayo, president of Nigeria Liquefied Petroleum Gas Association (NLPGA), an umbrella body of cooking gas producers and marketers, said the opportunities created by the petrol subsidy removal would provide further growth impetus for the gas industry since it remains the most available alternative fuel in the automotive and industrial sector.
He also said Nigeria can save over N1 trillion in cash from adopting the autogas conversion initiative which will enable automotive engines and power-generating sets to run on gas as an alternative to fossil fuel and diesel.
By shifting towards gas, analysts say Nigeria can significantly reduce its carbon footprint and contribute to global efforts in combating climate change. Embracing gas helps improve air quality, reduce pollution-related health issues and protect the environment. It also plays a vital role in power generation. Nigeria has been grappling with significant challenges in its electricity sector, including inadequate power supply and frequent blackouts. Gas-fired power plants offer a reliable and efficient source of electricity generation. Expanding gas infrastructure and promoting gas-powered plants can help address our power deficit and contribute to economic growth.
Similarly, it has numerous industrial applications including manufacturing, petrochemicals, fertilizers, and transportation. By embracing gas, Nigeria can stimulate industrial growth and attract investments, which will in turn create employment opportunities, enhance local manufacturing capabilities and contribute to economic development.
It also serves as a reliable and affordable energy source for domestic use. It can be used for cooking, heating, and powering appliances in homes. Promoting the use of gas for residential purposes can reduce reliance on traditional biomass fuels such as firewood, charcoal, or kerosene, which contribute to deforestation, indoor air pollution, and health hazards.
There are also the business and job opportunities that would arise from increasing the Autogas facilities from currently less than 100 to more than 12,000 in short and long terms. Also, the corresponding increase in Autogas conversion and cylinder manufacturing centres would boost the needed conversion of more than five million vehicles targets, and encourage massive infrastructural and economic development. In the same token, it would further reduce the percentage of carbon emissions from the transportation sector, thereby enhancing our chances of meeting the net zero targets by 2050/2060.
Despite the huge benefits that can accrue to Nigeria from effectively switching to the use of gas, the industry is still far from being rightly positioned to harness and effectively utilise our gas resources, mainly due to lack of the necessary infrastructure and to put the needed infrastructure in place, huge investment is needed.
It would require government policies and incentives to attract private investments and create an enabling environment for gas exploration, production, and utilisation. Public awareness campaigns and education about the benefits of gas can help promote its adoption among Nigerians.
In what stakeholders have termed a right step in the right direction, the federal government has commenced enlightenment of operators on the need to urgently obtain the requisite petroleum storage licence and to engender the transition from white products to gas. While announcing that no unlicensed petroleum product dealer would be allowed to load products from August 1, 2023, as it vowed to shut down such businesses beginning from that day, it cautioned that anyone who wants to deal on petroleum products must obtain a licence, stressing that “no licence, no loading of any petroleum product.”
The warming was handed down through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) which recently concluded stakeholders’ engagements on gas utilisation in Nigeria across the six geopolitical zones of Lagos (South-West), Enugu (South-East), Rivers (South-South), Bauchi (North-East), Kano (North-West) and Abuja (North-Central).
The Authority chief executive, Engr Farouk Ahmed, said the engagements seek to encourage large consumers of petroleum products to not only operate within the regulatory space but also to become aware of the comparative advantages between the different fuels particularly gas which has been designated as Nigeria’s transition fuel.
According to him, the Authority is determined to actualise the federal government’s autogas policy, adding: “It is in this regard that the federal government has put in place various initiatives and policy framework including National Gas Expansion Programme (NGEP) and the Decade of Gas Programme (DOGP). The Petroleum Industry Act (2021) has also established within the Authority the Midstream and Downstream Gas Infrastructure Fund to catalyse gas investments. These efforts are yielding significant results, yet more collaborations and interventions are needed to improve domestic gas utilisation. The Authority empowered by the Petroleum Industry Act (2021) is poised to enable the growth of the industry. The 12 regulations recently gazetted unlock the golden opportunities and signpost the pathway to energy security.
“It is therefore our hope that this engagement will create the necessary awareness and make the compelling case for industry operators to foster a compliance culture which alone guarantees safer and sustainable facilities”.
The 12 gazetted regulations expected to unlock the golden opportunities and signpost the pathway to energy security include: Midstream and Downstream Petroleum Operations, Natural Gas Pipeline Tariffs, Gas Pricing Domestic Demand and Delivery, Petroleum Measurement; Petroleum (Transportation and Shipment), Assignment and Transfer of Licence and Permit, Gas Distribution System, Gas Trading and Settlement Regulations, National Strategic Stocks, Midstream and Downstream Penalties and Enforcement Mechanisms, Midstream Gas Flare Regulations as well as Midstream and Downstream Petroleum Alternative Dispute Resolution.
Data obtained from NMDPRA shows the historical and future consumption (2015 to 2030) of Automotive Gas Oil (AGO) also known as Diesel and LPG. It indicated that while AGO consumption increased from 2015 and peaked in 2020, the trend showed a decline in consumption and this is predicted to continue until 2030. Specifically, its consumption is predicted to decrease by more than 50 per cent in 2030 compared to 2015.
On the other hand, the data revealed a wider use of LPG in vehicles, households, power generation and industrial applications in Nigeria as its consumption is predicted to increase by over 500 per cent within the same period. The demand for LPG is predicted to surpass that of Diesel around 2025.
In the same vein, the data showed that while the number of gas depots in the country rose from 12 to 27 between 2017 and 2022, LNG facilities increased from five to 42 even as CNG facilities grew from 97 to 102 within the same period. Also LPG filling plants increased from 675 to 1,338, representing a 98 percent increase.
The initiative is already yielding fruits as more indigenous companies are making significant investments in CNG facilities. Just recently, Innoson Vehicle Manufacturing (IVM) announced the mass-production of CNG buses, likewise NIPCO -an indigenous downstream petroleum and gas operator – leading in the conversion of petrol-powered vehicles to autogas. More cheering is the recent disclosure by oil marketers that about 800 tankers that formerly transported petrol to filling stations were being converted to start moving gas to retail outlets, in addition to existing 4,000 trucks of Dangote’s companies running on gas. The icing on the cake is the government’s identification of over 10,000 stations across the country that would dispense autogas to the public.
In conclusion, embracing gas as an energy source is crucial for our sustainable development. By leveraging its abundant gas reserves, industry experts say the country can address environmental concerns, diversify its energy mix, improve power generation, stimulate industrial growth, meet domestic energy needs and unlock significant economic opportunities. Ultimately, it is a win-win for the government, the governed and our environment.
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