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‘Flared Gas Enough to Generate 3000Mw’

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Electricity
  • ‘Flared Gas Enough to Generate 3000Mw’

Flared gas in Nigeria is enough to generate between two and three gigawatts (Gw) of electricity.

Nigerian Gas Association (NGA)President, Dada Thomas, spoke while speaking on natural gas under-utilisation to power the economy.

In a document titled: “Natural gas as a catalyst for Nigeria economic transformation: Technical challenges and opportunities”, Thomas, who is also the Chief Executive Officer, Frontier Oil Limited, said the country with 192 trillion cubic feet (Tcf) reserves, has the world’s ninth conventional gas reserves. However, Nigeria only ranks about 22nd in terms of gas production and even lower consumption.

He said: “Some 48 per cent is associated gas (AG) and 52 per cent non-associated gas (NAG) with 42 per cent located offshore and 58 per cent onshore distributed over a large geographical area and largely in small pockets of less than 1Tcf. thus harnessing Nigeria’s gas resources is neither easy nor cheap.

“About 73 per cent of our gas reserves are controlled under Joint Venture (JV) contracts, largely by International Oil Companies (IOCs), 12 per cent under Production Sharing Contracts (PSCs) and 15 per cent under sole risk contracts by indigenous companies, including two per cent by marginal field operators.

“The distribution of control of gas resources is considered by many as a major impediment to accelerated development of the domestic gas (Domgas) market.”

According to Thomas, the domestic gas market has grown over the years, but still only 13 per cent or 1.01 billion cubic feet (Bcf) of total gas production of 7.5Bcf per day is consumed locally, while 43 per cent is exported via liquefied natural gas (LNG) and West African Gas Pipeline, 34 per cent is used for gas injection and 10 per cent flared.

He said: “The growth in production is encouraging, but the reality is that we found ourselves engulfed in darkness generating less than 5Gw of reliable grid power while flaring enough gas to generate 2Gw to 3Gw of electricity while some power plants are starved of gas.

“We export 43 per cent of our gas production and only have three gas based industries adding value locally and barely any meaningful gas transportation infrastructure compared to our peers.”

Thomas said the failure to harness gas resources effectively and equitably for the benefits of all Nigerians and investors, is not an option. With a population, which according to World Bank, is growing at three per cent per annum and projected to reach 233 million by 2025, and GDP growth lagging at 2.7 per cent per annum, failure is not an option.

He said: “If we fail to do the right thing to grow our economy, we are likely to experience societal upheavals the like of which may have never been seen before by mankind.

“More than 70 per cent of domgas is consumed by power plants within an illiquid and poorly regulated gas-to-power value chain that is threatening to cause systemic bankruptcy of all parts of the value chain and possibly the banking sector

“We, therefore, must conclude that we haven’t optimally exploited our gas resources for domestic use for the benefit of our nation or our people and those brave enough to invest in our country’s development.

“The forecast demand for gas is ambitious with a target of 8Bcf per day to 10Bcf/d in the long term, the bulk of about 60 per cent planned to be used for power generation. Given the relatively poor performance so far in developing the domgas sector over the years how then do we propose to achieve these ambitious targets and the transformation of the Nigerian economy using gas, given the various impediments and issues that have bedeviled and continue to plague the domestic gas industry?’’

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.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Agric

Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

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Petrocam

Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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Nigeria Will Benefit Less From African Trade Deal – NESG

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Nigeria Will Benefit Less From African Trade Deal – NESG

Nigeria and other resource-based countries will benefit less from the African Continental Free Trade Area than economies that are more diversified, the Nigerian Economic Summit Group has said.

The NESG, a private sector-led think-tank, said in its 2021 Macroeconomic Outlook that Nigeria could reap more gains through export diversification away from crude oil.

It said trade in Africa remained dominated by raw materials and less processed products, adding that on average, minerals and agriculture accounted for 44 per cent and 16 per cent of intra-African trade respectively between 2007 and 2017.

The NESG said, “Evidence has shown that African economies that are more diversified and have improved transport infrastructure, would benefit more from the trade pact than others that are resource-based and agricultural dependent.

“Putting this in context, South Africa currently accounts for 40 per cent of intra-African manufacturing imports. On the other hand, resource-based countries, such as, Algeria, Egypt and Nigeria – which collectively account for approximately 50 per cent of Africa’s GDP – contribute only 11 per cent to intra-African trade.”

“Another bone of contention is the issue of ‘rules of origin’, which constitutes a significant risk factor. This implies that protectionism practices by some countries could constitute a setback for the establishment of the ambitious single market for Africa. But there are several reasons to be optimistic,” it added.

The group said the World Bank estimates revealed that the AfCFTA would promote manufacturing exports over natural resources, agricultural and services exports, and that manufacturing exports would account for one-third of the projected total exports of $2.5tn by 2035.

It said, “Nigeria could reap more gains through export diversification away from crude oil, as manufacturing exports currently account for an average of nine per cent of the country’s total exports.

“This suggests that efforts should be directed at strengthening domestic value chains, particularly the agro-allied industrial base.

“To achieve this, there is a need to attract private capital, most especially, FDI, that would allow for knowledge and technological transfers.”

According to the NESG, for Nigeria to maximally benefit from the trade deal, there is an urgent need to also address transport infrastructure bottlenecks and provide improved logistics.

It said, “Finding a lasting solution to the Apapa gridlock by creating similar ports in other regions of the country, so as to ensure speedy clearance of consignments needs to be prioritised.

“Nigeria also needs to set standards for locally-made goods to enhance their attractiveness in the regional market.

“The Nigerian government as a matter of urgency needs to operate an efficient and corruption-free land border system, so as to guide against the importation of low-cost sub-standard products into the country.

“It is only when these and many more reforms are implemented that Nigeria can begin to reap the benefits of the trade deal.”

The group noted that owing to the outbreak of COVID-19, the implementation of the AfCFTA was postponed from July 1, 2020 to January 1, 2021.

It said, “The key goal of the free trade pact is to expand the volume of intra-African trade, which stood at 16 per cent in 2018 .“Till date, 36 countries, including Nigeria, have ratified the agreement. The trade deal is expected to create a single market with a combined GDP of $2.5tn and total population or market size of 1.2 billion.”

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