BY OLAPEJU OLUBI
The Nigeria Extractive Industries Transparency Initiative (NEITI) has declared that an annual investment of $20 billion is needed to fully harness the 200 trillion cubic feet (tcf) of gas reserves the country boasts of.
The Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, disclosed this in Abuja on Monday at the AfriTAL/NRGI hybrid policy dialogue on Nigeria’s Decade of Gas plan.
According to him, the federal government, by leveraging on the provisions of the Petroleum Industry Act 2021, should urgently put a national gas utilization policy in place.
“Such policy needs to be clear on the specific roles of the industry, government, and investors in implementing the plan.
“Similarly, the gas utilization plan should show the market-driven opportunities that would successfully translate the gas plans into sustainable economic development.
“Given the shrinking fossil fuel investment landscape, clarity is required of the infrastructure to be prioritized.
“The PIA’s Midstream and Downstream Infrastructure Fund (MDIF) provides an avenue to fund the gas infrastructure if a robust transparency mechanism can be implemented to monitor the process closely.
“This Policy advisory recommends a strong team of experts to assess the opportunities available within the gas sector to boost the economy and achieve energy access. The right policy and politics will send strong positive signals to investors to move into the gas sector.
“NEITI recommends a costed plan with realistic targets that is easy to implement. For the gas utilization policy to work, there is a compelling need for deliberate ambitious investment in its infrastructure. This includes specific connectivity across upstream facilities to processing, power plants, and other end uses.
“The PIA provided the most significant progress for the gas sector in strengthening governance and providing fiscal frameworks for the sector’s growth”, he explained.
In his welcome address, the Executive Director, African Initiative for Transparency, Accountability and Responsible Leadership (AFRITAL), Dr Louis Ogbeifun, said that many countries are abandoning fossil fuels as a significant energy source, urging the federal government to ensure that Nigeria joins the train as promised.
He said the country would have to increase its crude oil production in the short run beyond the current level to have money to diversify and invest in other alternative sources. “Even in the medium- and long-term periods, natural gas, which Nigeria has in abundance, which has been described as cleaner than coal or petroleum is also within the fossil fuel family.
“This means that walking off fossil fuel for Nigeria is not immediately foreseeable. The question is, how does Nigeria maximize its hydrocarbon benefits with so much of its assets lost to vandalism, crude theft, and the massive depreciation of its currency?
Nigeria’s focus on using gas as a sustainable energy alternative is capital-intensive. It has been speculated that Nigeria would need over $1 trillion to achieve the 2060 zero emission targets.
“With the dwindling international funding support and the expulsion of foreign interests from some parts of the continent, which is spreading to other countries in the sub-region, we, as citizens, must be worried about how to fund and birth the gas projects in a manner that would be cost-efficient, cost-effective, and less hazardous to our women, youths and the rest of our citizens” he stated.
In his remarks, Aaron Sayne, Lead, Domestic Energy Transition, Natural Resource Governance Institute (NGRI) said that gas development should not be left in the hands of the International Oil Companies IOCs alone.
He, however, cautioned that by wresting the task from IOCs, vital local capacities must be developed.
“Locals can play but how many of them have capacity and finance to take over IOCs oil projects. Banks in Nigeria have low lending capacity and global lending in that space is shrinking. NLNG Train 7 is in progress but I can assure you that to get financing for Train eight or nine is a tall order. Nigeria should eye Asian markets for LNG sales.
“To ensure local consumption, deeper investments are needed”, he noted.
