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$2.8bn Pipeline Contract’ll Change Nigeria’s Energy Landscape – Presidency

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Gas-Pipeline
  • $2.8bn Pipeline Contract’ll Change Nigeria’s Energy Landscape – Presidency

The Presidency on Sunday said the nation’s energy landscape was set for a major change with the award of a $2,809,522,548.36 gas pipeline contract approved by the Federal Executive Council as proposed by the Ministry of Petroleum Resources.

The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, disclosed this in a statement made available to journalists in Abuja.

Shehu quoted the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, as informing the FEC that the project was for the construction of a 40-inch pipeline across 614 kilometres from Ajaokuta to Abuja, Kaduna and Kano.

“This should mark an important landmark in the implementation of the first phase of the Nigerian Gas Master Plan approved in 2018,” Shehu said.

The presidential spokesman added that the second contract approved under what he called “massive, blockbuster investment” was for the engineering, verification, procurement and construction of a 40-inch 30 kilometres Odidi to Warri gas pipeline expansion project.

This, he explained, was meant to transport additional gas from upstream producers to various demand points at the costs of N7.7bn and $56m.

He added, “The projects, which can rightly be termed as being among the President’s pet projects, is owed, in part, to his vision and momentum back in his days as the Federal Commissioner for Petroleum Resources.

“That time, Colonel Buhari led think tanks to plan the country’s gas future and initiated the contracts for the laying of a massive network of petroleum pipelines, linking the length and breadth of the country, and laid the foundation for the construction of three refineries, Warri, the second Port Harcourt refinery and the one in Kaduna, in a bold move to augment the supply and distribution of petroleum products in the country.

“That was the golden period of the country’s petroleum industry when domestic refining not only met the requirements of home consumption, but also produced excess 150,000 barrels of refined products for export.

“The bold step taken by the President on Wednesday seeks the integration of the eastern and northern parts of Nigeria, which had suffered past neglect, into the gas economy.”

Shehu added, “Gas pipeline infrastructure had been concentrated in the coastal areas and the North and the East had been left largely untouched by the industrial revolution that has come with the gas pipeline network.

“It is, therefore, not surprising that the western part of the country is having more economic activity.”

Shehu said the ruling All Progressives Congress, which campaigned on the issue of inclusive growth, was of the view that the achievement of a balanced and equitable national development could only come with a balanced growth of the states and the regions.

The party manifesto, he added, had identified the development of natural gas transportation infrastructure as a key project in that regard.

He stated, “These contracts for pipelines and LNG terminals to be set up at various points will, therefore, expand opportunities for balanced national development to counter the backwardness and geographical disadvantages of the North and the East.

“In line with the country’s rapid growth in energy demand, the connection of the South and the North should serve as a boost to the nation’s energy security.

“The increased energy transportation networks will be a shot in the arm for the struggling manufacturing industry, which suffers from the acute crisis in the energy sector. It will cater to the needs of cement and fertiliser plants; power plants, transportation systems; and even household consumers, thereby increasing gas share in the country’s energy consumption mix.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

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Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold

Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin

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Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.

 

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Crude Oil

Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting

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Oil Prices Rise to $64.32 Amid Expected Output Extension

Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.

Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.

“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.

Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.

“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.

Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.

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