…$15bn investment required to strengthen infrastructure -Kyari
Nigeria will require between $10 billion and $15 billion over the next three years to ramp up gas infrastructure and could earn as much as $18.3 billion annually to the domestic economy.
The Group Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, gave the estimate of investment required in gas over a three-year period at the 2024 edition of CERAWeek, a global oil and gas event in Houston, the United States, organised by S&P Global.
The programme which ended on Friday was themed “Multidimensional Energy Transition: Markets, Climate, Technology and Geopolitics”.
Leading international consulting firm, PricewaterhouseCoopers (PwC), estimates that harnessing Nigeria’s proven gas reserves can stimulate an estimated Gross Value Added (GVA) of US$18.3 billion annually to the domestic economy.
PwC further says optimising the domestic utilisation of gas could support 6.5 million Full Time Equivalent (FTE) jobs for the local economy.
At the Houston conference, Kyari argued that the main focus of the NNPC at the moment was building capacity to deliver gas into the domestic market, reiterating that Nigeria remains a gas country with associated oil rather than the other way round.
Nigeria has over 208 Trillion Cubic Feet (TCF) of proven gas reserves and about 600 TCF in potential reserves, but can hardly get the resource out of the ground due to lack of infrastructure and the much-needed investment in the sector.
The price of cooking gas has been rising steadily over the months in the country and the National Bureau of Statistics (NBS) says the average price of 5kg of cooking gas increased from N5,139.25 recorded in January 2024 to N6,154.50 in February 2024.
The demand for cooking gas in Nigeria has seen a dramatic increase after it was discovered that it can be used not only for cooking but for powering generators.
Factors influencing the upward trend in the price of cooking gas in the local market include inadequate investments in natural gas exploration within the country and a significant reduction in the production of associated gas, which is derived from crude oil exploration, due to rampant crude oil theft.
Kyari said the country takes the issue of energy availability very seriously and seeks the cheapest route to explore it.
He observed that there is now a clear opportunity that gas has, which wasn’t there 10 years ago, explaining that the NNPC and its partners were building a number of trunk lines that would supply gas within the network.
He said within the next three to four years, there would likely be in-country gas infrastructure to raise supply, especially domestically.
“What we see is that we will probably need between $10 billion to $15 billion in two to three years. That should cover the immediate gap. And of course, looking beyond providing gas in the domestic market, which is to see how relationships and partnerships can create gas for export,” Kyari said.
“When you look at that and then probably you see another incremental $10 billion to $12 billion which will create the opportunity for growth,” he said.
The NNPCL chief said there was promise in an ongoing engagement, which had reached a very advanced stage, to create a pipeline that could pass through 13 African countries into Morocco and then to Europe, estimated at $25 billion.
He mentioned the ongoing construction of the NLNG Train 7, expressing the hope that it would likely double Nigeria’s current capacity in the liquefied natural gas space when completed, and called for support from other countries in sub-Saharan Africa to close the energy availability gap.
