[By Sopuruchi Onwuka]
The urgent tone sounded by analysts over energy transition has caused government to count losses of poor management of Nigeria’s petroleum resources since 1957, with the conclusion that the country has burnt half of its resource value in gas flaring.
Chairman of Nigerian Gas Expansion Programme (NGEP), Dr. Mohammed Ibrahim, stated at a stakeholders meeting in Lagos that continues gas flaring has not only led the loss of the market value of the resources but also loss of value chain business and economic growth opportunities.
The Oracle Today reports that domestic utilization account for the least proportion of produced natural gas in the country while export gas account for the largest volume of produced gas. In the median spread are onsite fuel gas, reinjection and flaring.
The nation’s poorly managed and insolvent electric power sector account for about 70 percent of domestic natural gas demand, posting a grim picture of local industrial, commercial, domestic and transportation capacity for gas consumption.
With the domestic transportation sector heavily reliant on fuel liquids, especially petrol and diesel, value destruction associated with massive importation of transportation fuel has spread across the nation’s critical economic mechanisms including foreign exchange, balance of payment and local transportation cost.
Annual fuel subsidy sponsored by government crossed N1.4 trillion in 2014; and fall in revenues is forcing policy drivers to begin full exploitation of fuel value of gas in pulling demand from petroleum liquids.
The NGEP was conceived to diversify domestic fuel away from petrol and diesel by promoting use of natural gas for transportation and micro-power generation and sundry industrial activities.
Dr Ibrahim told stakeholders in a sensitization programme hosted by NGEP Committee that Nigeria burns 324 billion cubic of gas annually in gas flares at oil production sites in the country.
In energy value conversion, the volume of gas flared by operators in the country amounts to over 54 million barrels of oil equivalent which, according to Dr Ibrahim, could command over N1.0 trillion in about 85 development projects.
Other economic opportunities lost in the nation’s huge volume gas flares include annual 1.2 million job opportunities, $2.0 billion or N1.0 trillion in carbon emission credit, 12 megawatts of electricity generation and 600,000 tons of liquefied petroleum gas, also called cooking gas.
Dr Ibrahim decried Nigeria’s status as Africa’s largest exporter of liquefied natural gas (LNG) while holding the despicable record of the least per capital gas consumption in the continent. He blamed the situation on the country’s inability of using its abundant gas resources to spur and develop robust domestic industrial capacity.
He stated that government was pushing the gas expansion programme as a logical step in protecting the nation’s dwindling foreign exchange revenue from the import demand pressure from the domestic fuel market.