Obstacles rock Nigeria’s multi-billion dollars gas sector

Position in world gas reserves threatened




ajor impediments have rocked growth of Nigeria’s multi-billion dollars gas sector, threatening the country’s position as the world’s ninth biggest gas haven.



This, checks by New Telegraph revealed, is aside a Coronavirus-induced oil price shock that slashed income and weakened Nigeria’s currency.



Nigeria has announced a policy direction towards gas development after gains from its oil suffered a nosedive, but a correspondence between the Ministry of Petroleum Resources and gas producers sighted by this newspaper showed that the plan for gas was under threat posed by three key challenges.



“Nigeria is currently faced with challenges such as gas pricing for the domestic market, limited infrastructure for distribution and a commercially-viable market,” the document read.



Acknowledging these impediments, Managing Director and Chief Executive Officer, Nigeria LNG Limited, Tony Attah, underscored the need to harness Nigeria’s gas by tackling some of the barriers, including passing a regulatory framework for the upstream sector and the launch of the Nigerian gas transportation code to further drive gas-based have been stressed.



Attah confirmed that increasing “Nigeria’s presence in the global LNG market, which serves as an opportunity to harness the gas for domestic consumption, has long been discussed by industry stakeholders.”



He noted that Nigeria was currently faced with challenges such as gas pricing for the domestic market, limited infrastructure for distribution and a commercially-viable market.

He said: “The FID for Train 7 and award of its EPC contract is very reassuring, as it renews our hope that Nigeria LNG will maintain a significant market share in the global gas market and will continue to reap the potential benefits in the market.



“Whilst a quick switch to renewables and other cleaner energy sources is desirable, current data indicates that the practical reality is that it cannot be achieved on a global scale as quickly as many parties are pushing for.

“We must, therefore, find a way to bridge the gap between where we are today, and where we desire to be. This is the role that gas is expected to play in the medium and long-term.”



Attah said there were vast opportunities available in Nigeria’s huge gas reserves in comparison to crude, and other prospects the Train 7 project will offer the country.



“We have proven 200 tcf of gas, and we have another 600 tcf that we know about but need to prove under the SEC rules. Today, as number 9 in the world in terms of gas reserves, if you prove the 600, you go straight away to number four,  ahead of Turkmenistan.


“For me, that is a major, major opportunity to really jumpstart the sector. A lot depends on the fiscals and how the government is able to incentivise gas development, which must happen,” he noted.



Attah said in addition to increasing the country’s footprints in the global LNG market through the execution of Train 7, Nigeria LNG had also concluded plans to take advantage of opportunities to develop a domestic gas market and spur gas-based industrialisation.


“We are currently looking at bringing LNG in-country. With the global market dwindling, we see very high demand for gas and other forms of energy in Nigeria, and indeed in Africa. As you know, more than 50 per cent of the population that does not have access to energy in the world is in Africa.



“So, the domestic LNG project that we are looking at is to be piloted in Nigeria and then we will go regional and then look at Africa as a whole. It’s a project that’s already on.


“As we speak, there are a few people that have already indicated interest, and we are working with them to see how much capacity they are able to develop to make this real.



“We have just established that the price is no longer within anybody’s forecasts, view or control, we perhaps have a future where we have to be a market maker for this to be able to have the essence of the full value chain coming to fruition in-country,” he said.


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