Senior Business Strategy and Performance Analyst, Nigeria Liquefied and Natural Gas (NLNG), Ezekiel Adesina, has stressed the need to expedite action on the implementation of the impending Liquefied Natural Gas (LNG) projects in the country.
Also included are the NLNG Train 7, Brass LNG, and Ok LNG, for long term export contract and other economic benefits, he said.
Adesina, who spoke in Lagos, said the consequences of alternative gas such as shale gas, coal-bed methane (CBM), tight gas and gas hydrate, could be reduced if urgent measures are put in place in the sector.
Such measures,he explained, include change of business strategy for export and local market, diversification of business group for domestic use of natural gas, the independent power projects (IPPs) and the petrochemical plant. He added that non-gas investors should not be allowed to participate in gas exploration.
He stressed the need to exploit full gas value chain, upstream, midstream and downstream of the gas sector as well as gas fiscal incentives. These he said would promote new investments in the sector.
Adesina said with 187 trillion standard cubic feet (Tscf) of proven gas reserves in the country and potential of 600 Tcf in probable reserves, there is need to fast-track the implementation of the Gas Master Plan to overcome some of the bottlenecks in the sector.
He said the AGFA fiscal regime favours existing upstream investors. He added which according to him, acts as a barrier to non-oil investors and new entrants into the gas sector that there is need to create a separate fiscal regime for gas to make possible a level playing field for all investors in the sector.
Adesina said the gas value should be unbundled to allow various players within the value chain to participate and increase its growth.
He said Nigeria can only survive the current change in the global energy if the country will quickly respond to change in the oil and gas sector.
He said: “There is need for us as a nation to have a sense of urgency in actualising numerous plans and projects in the gas sector before the economic benefits of our gas natural resources are lost. The need for change cannot be ignored if Nigeria gas agenda of making Nigeria a gas hub destination in Africa is to be realised.”
He said there is need to take a critical look on the global gas environment and the Nigeria gas market in view of the current unconventional gas revolution across the globe, adding that the unconventional gas will continue to challenge the current gas business model.
He said the economic viability of unconventional gas could be realised with technological advancement and pursuit of efficiency to reduce costs, financial risks and wellhead prices in production.
Shale gas started with Mitchell Energy in 1990s. It pioneered the application of two oilfield techniques, hydraulic fracturing and horizontal drilling, to release natural gas trapped in hardy shale-rock formations. Economies of scale and improvements in techniques have halved the production costs of shale gas, making it cheaper even more than some conventional sources.
Information from the Nation was used in this report.