Natural Gas has unprecedented potential to impact positively on the economy of any nation that is endowed with it. As a fuel, it burns cleaner and has become the fuel of choice for power globally. As feedstock, it is able to catalyze major industrial growth through fertilizer, petrochemicals and other related gas based industries.
Nigeria's Gas History
Nigeria's Natural Gas reserves qualifies us to be in the league of these successful nations. With over 200TCF of proven gas reserves, Nigeria is ranked 9th in terms of size of proven plus probable (2P) reserves –both of which have catalyzed a major industrialization platform from gas. According to the US Geological Survey estimates, gas reserves potential in Nigeria could be as high as 600 TCF if properly explored. This presents huge potential for growth.
Before 1975, the gas sector was characterized by huge amount of flaring because gas was seen as a nuisance. The successful implementation of NLNG in 1999 heralded the start of the evolution of Nigeria's gas sector. Through very favorable and attractive fiscal incentives, there was a proliferation of new export oriented projects such as WAGL, GTL, etc.
This era also saw a small increase in the utilization of gas in both the domestic power and industrial sectors, resulting in noticeable decline in gas flaring. Gas consumption in the domestic market in Nigeria was relatively flat at approximately 0.3 bscfd. From year 2002, Nigeria began to experience a general increase in domestic demand mostly driven by the power sector. Gas consumption in the domestic market has grown slowly over the years to the current level of about 1.01BCf/d and is projected to grow to about 3 Bcf/d to 5 BCF/d over the next decade with the demand driven by the power sector.
There is now broad acceptance that successful implementation of functioning gas-based industries will require private sector participation, and the Government's role should be limited to providing the appropriate commercial and regulatory frameworks to stimulate this. Regarded as one of the best in the world, Nigeria's Natural Gas is low in Hydrogen Sulphide (H2S) and Carbon Dioxide (CO2) impurities. Despite this advantage gas flaring (estimated at nearly $2million/day), constitutes, to date, a phenomenal wastage in Nigeria's resources. However considerable successes have been recorded in reducing flaring and new initiatives are planned to achieve zero routine flaring.
