By Qouzeem Safiriyu
Oando, a leading integrated energy solutions provider, has projected that the total estimated investment requirement in the midterm to achieve power, domestic gas demands and unlock Nigeria’s gas potential is $55billion.
In a breakdown presented on Nigeria’s investment opportunities in gas and power, the company put forward that, assuming the development of 20% of Nigeria’s proven reserves (19TCF), a total financial requirement of about $55bn would be needed to address the country’s objective. It assured that the investment would bring about gas sector restructured development, enhance gas utilization and monetization, improve power generation capacity and provide adequate returns for the investors.
Bolaji Osunsanya, the Chief Executive Officer of Oando Gas & power, represented by Franklin Umole, who gave this insight at the 16th Annual Policy roundtable of Centre for Petroleum Information (CPI) held recently in Lagos, went further to present analysis of the projected amount, taking into account; financial gaps and requirements.
In his analysis, gas resources, gas reserves and gas development requires $19bn. Total estimated funding requirement based on Woodmac data for large scale Niger-Delta gas development, required for the studies, seismic data gathering, surveys and appraisals to unlock gas reserves and develop fields for domestic supply.
Gas processing would also require $15bn. Funding requirement to develop at least 5 medium scale Central processing facilities.
For gas transportation, $6bn is earmarked. Estimated capital expenditure for developing a 2,000km gas pipeline to various regions in the country at the rate of $3million per km, he told the audience.
While gas market would gulp another $15bn, which is required investment needed for power transportation and distribution as reported by the Presidential Task Force on power.
Still presenting his paper, Gas to Power: Opportunities and challenges (private sector view), he enumerated the enormous challenges in the Nigerian Gas Industry to include huge volume of unexploited gas resources as a result of lack of field development, preference for investment in oil field development due to better returns on investment and profitability with associated gas contributing significantly to available domestic volumes; skewed coverage, inflexible and poor interconnectivity of the existing transmission network, bankability of key agreements such as (GSPAs, GSAs, GTAs etc), vandalism and historical insecurity in gas regions as well as activities of militant groups such as Niger Delta Avengers and others, country risk issues limiting foreign investment and funding in the sector, Non-cost Reflective tariffs (power sector particularly).
administration, need to develop modern alternative brewing technology be it CNG or LNG, that has to be a mix and basis for establishing market tariffs need to be revisited to ensure the apparatus reflect the current economic realities.