The Nigeria Liquefied Natural Gas Limited has advocated that commitment to effective implementation of the decade of gas plans will help navigate the challenges around utilising available resources to meet the growing demand for gas in a more sustainable manner.
Managing director of NLNG, Dr. Philip Mshelbila, who made this known however added that this is only possible if a broad range of stakeholders made a concerted effort to significantly invest in infrastructure to enable the connection between supply and demand.
Dr. Mshelbila made this disclosure at the CEO’s panel session on the topic “Building Energy for Tomorrow”, while responding to how stakeholders can create the enabling environment at the just concluded Nigeria International Energy Summit (NIES) in Abuja.
This is even more as the managing director revealed an ongoing building of a 3rd Jetty alongside with Train 7 which would be equipped with a loading system that would be able to load small vessels that can also be used for coastal supplies
Meanwhile, the MD who discussed how the country could connect between natural resources and the demand, revealed four major challenges that needed to be addressed, including pricing, the nature of government fiscal policy, low electricity capacity, impact of crude oil theft on gas.
He said, “We have the resources recognized which is underground. We also have the demand that is recognized that people who are starved of energy living directly above the reservoirs. It really about that connect. How do we connect the two in a sustainable manner which is biggest challenge?”.
Dr. Mshelbila buttressing his points, used the Nigeria energy industry which is a global business as case study to underline the existing gap between harnessing the resources to addressing the needs of the rising population, said six strings in 2022, the sector operated at roughly 62 per cent capacity of utilization while on domestic market, operated at roughly 4GW of electricity for a population of 200 million people which was attributed to lack of connect.
On the Petroleum Industry Act (PIA), he admitted that the Act has helped to provide roadmap towards repositioning the sector also revealed that some substantial issues needs to be considered such as issue of subsidy and how gas which is the leaver can power the entire value-chain.
He explained that for there to be a smooth running value-chain system, government must ensure it put in place a workable fiscal structure that would bring positive change to the economy and drive development which is beyond passing more Acts.
“How do we ensure that the person investing upstream in gas development, the person transporting, the building, the power plant, the transmission system and the distribution system can all get paid at the end of day, that may come through pricing, and other fiscal structure that government may need to put in place but if that does not work then we will continue discussing the same thing.
“Reason is because electricity is at the core of the energy mix of this country and will remain so for a very long time because the utilization of energy comes via electricity yet we talk about so many things but failed to fix this. So, whatever energy policy the incoming government takes, determines the success or failure of the energy policy that they are going for”, he added.
Dr. Mshelbila while also pointing out issues in the area of gas exportation, said about 40 per cent of the country’s production capacity was left fallow in the last one year as a result of crude oil theft around the oil producing regions. “We may have probably normalize the impact that it has on our oil export but forgot the impact it would have on the gas both the gas that would come into the domestic market and the gas is going to export market as well and if this is not addressed then we have not started.
“The decade of gas provides the comprehensive plans with the solution on how demand will grow and the supply potential of what is available in Nigeria as well as things that can be done within a period of 10 years to meet the demand. It also looked at how to connect these two into physical infrastructure of which investment is needed both by government and private sectors to enable between supply and demand. There is also the need for a home grown solution as well”.
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