FG decries inadequate supply to NLNG despite 208tcf proven reserve

Despite having a proven gas reserve of 208 trillion cubic feet, the Federal Government (FG) expressed concerns on Monday about the inadequate gas supply to the Nigeria LNG plants. The Minister of Petroleum Resources (Gas), Mr. Ekperikpo Ekpo, highlighted the need to enhance the domestic gas market in alignment with the government’s efforts to promote increased utilization. He raised these concerns at the 3rd Biennial International Conference on Hydrocarbon Science & Technology (ICHST) in Abuja.

He said, “It is well known that our NLNG plants currently operate below capacity due to insufficient gas supply, which is ironic given our proven gas reserves. In fact, the ongoing train 7 project, aimed at increasing NLNG capacity by approximately 35%, further expands opportunities for gas producers. Despite this, our local gas market remains significantly underutilized.”

Ekpo pointed out that factors such as inadequate infrastructure, an unclear regulatory environment for gas, and pipeline vandalism were undermining the country’s ability to optimize the value from its abundant gas reserves. To address these issues, he mentioned that the Ministry is collaborating with relevant regulatory agencies to ensure that the robust regulatory and fiscal incentives provided for in the PIA 2021 are effectively implemented with respect to the optimization of its gas policies.

Speaking about the conference’s expectations, the Minister of Petroleum Resources (Oil), Mr. Heineken Lokpobiri emphasized the need for participants to not only propose homegrown solutions for the sector. While acknowledging the significance of fossil fuels to Nigeria, he stressed that the country’s primary goal is to increase its oil production.

During his keynote address on the theme of the conference, “The Future of the Oil and Gas Industry: Opportunities, Challenges, and Development,” the Secretary-General of the African Petroleum Producers’ Organization, APPO, Dr. Omar Farouk Ibrahim, revealed that funding from the Africa Energy Bank (AEB) would aid in the development of cross-border energy infrastructure.

This bank was established to address the funding gap in oil and gas projects resulting from the anti-fossil fuel investment policies of developed countries. He explained, “Currently, APPO and the Central Africa Business Energy Forum, CABEF, are collaborating to create an integrated energy market in the Central Africa Sub-Region by constructing the Central Africa Pipeline System, CAPS. CAPS is a comprehensive pipeline system designed to connect 11 Central African states through crude, product, and gas pipelines.”

Ibrahim noted that a major study conducted by APPO regarding the Future of the Oil and Gas Industry in Light of the Energy Transition had identified three imminent challenges that the transition poses to the African oil and gas industry. These challenges include funding, technology/expertise, and markets. He emphasized that while the world is committed to a rapid energy transition, Africa has a duty to use its abundant oil and gas resources to provide its people with energy, which is a powerful catalyst for socio-economic development. “In other words, Africa must shape a future for the oil and gas industry,” he added.

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