Nigeria requires $10bn annual investments in gas, power —Avuru

The Nigerian power sector requires an annual investment of $10 billion, about N3.06 trillion to be able to achieve its aim of producing 12 billion Standard Cubic Feet (SCF) of gas per day, build additional gas-fired plants and produce additional 36 gigawatts (GW) of electricity by 2020, according to Chief Executive officer of Seplat Petroleum Development Company Plc, Austin Avuru.

In his presentation at the recently concluded 10th International Conference and Exhibition of the Nigerian Gas Association (NGA) in Abuja, Avuru disclosed that 12 billion SCF per day of domestic gas supply is required to meet the 40GW power generation target; 10 billion SCF per day required increase in domestic gas supply to achieve the 12 billion SCF per day target, while 120 trillion SCF of gas is required to meet and sustain projected demand.

He maintained that gas to power would contribute over 80 percent of Nigeria’s energy mix well into the future, adding that Nigeria has the gas reserves to produce up to 51GW of electricity.

He projected that gas demand for power generation would increase by about 12 times, to 12 billion SCF per day, hence, according to him, the need for large-scale investments annually.

“For gas to continue playing a dominant role, a strong alignment of plans, investments and operations is needed across the entire value chain to deliver the benefits of thermal power,” he said.

He added that a well-connected and functioning gas pipeline network is critical to ensuring the nation’s gas to power aspirations can be met.

Listing the numerous investments opportunities in Nigeria’s gas pipeline network, Avuru stated that over 5,000 kilometers of gas pipelines is expected to be laid across the country, such as the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, while at least three gas processing facilities, with about one billion SCF per day capacity each to be designed and built among others.

In his own presentation, immediate past President of the NGA, Bolaji Osunsanya, disclosed that the scale of investment in the gas sector needs new thinking.

According to him, entrusting International Oil Companies (IOCs) or the federal government to develop the required gas infrastructure worked to an extent in the past; now, the public and private sector must work hand-in-hand on future developments.

He said the country should prioritise private sector-led investments whilst government restricts itself to the provision of securities and credit enhancements.

“Divestments, pledging currently owned tariff and cash flows, among others, remain options for government to support the required capital mobilization. You will agree that we are at an inflection point,” he argued.

The Gas Master Plan developed in 2008 was a welcome starting point, as the various policies and regulations within it addressed issues on key interconnecting pipelines and gas processing hubs as well as proper monetisation.

“The sector has continued to evolve and we now need a more aggressive, varied, and better coordinated approach for the gas implementation strategy to improve the pace of the development of critical gas infrastructure.

“Considerable work is in the offing and stakeholders are sufficiently motivated to contribute to the required discuss. It is our hope that our conference builds on work already done and heralds the necessary engagement for all aspects of the gas transformation,” he said.