Demand for gas supply in Nigeria’s domestic market is expected to rise exceptionally by 393.33 per cent within the next eight years, the Nigerian National Petroleum Corporation (NNPC) has disclosed.
According to the NNPC, demands for natural gas by the country’s domestic market which currently comprise mostly of power and industries, would rise from 1.5 billion standard feet per day (bscfd) to 7.4bscfd in 2027.
But the corporation said it was making plans to plug this expected rise in demand with seven natural gas projects it christened the ‘Seven Critical Gas Development Projects (7CGDP)’ which would bring in about 3.5bscfd of gas in 2021.
Speaking at a recent meeting in Lagos by the Society for Petroleum Engineers (SPE), the Chief Operating Officer (COO) Gas and Power of the NNPC, Mr. Saidu Mohammed, explained that the projected demand growth would be expected from the western part of the country with a total demand of 3.6bscfd; the northern area with 0.90bscfd demand profile; Ajaokuta axis with total demand of 0.84bscfd; and eastern area with total demand of 2.9bscfd.
Most of the demand growth, Mohammed noted would be driven by the power sector with the power plants in the western zone asking for 2bscfd; those in the north demanding for 0.85bscfd; in Ajaokuta – 0.71bscfd; and the east – 2.15bscfd.
Following closely, he added would be demands by commercial entities or industries with 0.8bscfd; 0.05 million standard feet per day (mmscfd); 0.13bscfd; and another 0.13bscfd expected from the west, north, Ajaokuta and the east respectively.
Mohammed, indicated that there would also be 0.6bscfd demand respectively by other Gas Based Industries (GBI) in the western and eastern areas as well as 0.2bscfd demand by the West African Gas Pipeline (WAGP) situated in the west.
“Base case domestic gas demand is expected to grow to 7.4bscfd by 2027,” Mohammed said in his presentation which THISDAY obtained.
“Based on all currently known domestic gas supply projects, domestic gas supply is forecast to close the demand by 2021 as we have identified Seven Critical Gas Development Projects (7CGDP) that are currently being fast tracked to bridge the foreseen supply gap by 2021: additional 3.5bscfd of gas,” he added.
He also said with regards to infrastructure to deliver the gas: “The anticipated completion of the ELPS II (Escravos Lagos Pipeline System) looping and OB3 (Obiafu/Obrikom/Oben) will be a game changer as hitherto stranded gas would be able to enter the market.”
“Projects such as the AKK and NGMC’s Ajaokuta mini LNG project will facilitate gas supply to northern parts of the country,” Mohammed further explained.
He said Nigeria was also recording an upsurge in gas processing projects, adding: “There has been an upsurge in the development of gas processing plants and NNPC has responded by creating a subsidiary company in NGC to drive all investments and partnerships to develop gas processing plants.”
While identifying gas pricing as a challenge in the industry, Mohammed stated that a convergence of factors such as government intervention; commissioning of the OB3 projects; NNPC’s 7-Critical Gas Projects and other upstream gas investment should lead to the lowering of domestic gas price.
He also noted that, “greater power generation and improved sector efficiency would lead to a more dominant power sector and reduction in commercial customers on the gas value chain.”
“As more GBI projects are being developed, gas utilisation would significantly increase, which would have a positive effect on domestic industrialisation, employment and economic wellbeing.
“Legal regime clarity and increased investment should result from the passage of the Petroleum Industry Governance Bill and Approval of PSC gas terms,” he said, with regards to conditions needed for further growth in the gas market.