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Print articleA Practical Cross-Border Insight into Gas Regulation Work
May, 2011 - Global Legal Group,
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1. Overview of Natural Gas Sector A brief outline of Nigeria’s natural gas sector, including a general description of: natural gas reserves; natural gas production including the extent to which production is associated or non-associated natural gas; import and export of natural gas, including liquefied natural gas (LNG) liquefaction and export facilities, and/or receiving and re-gasification facilities (“LNG facilities”); natural gas pipeline transportation and distribution/transmission network; natural gas storage; and commodity sales and Nigeria has abundant gas resources. As the world’s seventh largest, and Africa’s largest, deposit of natural gas, with a current reserve ofover 185TCF, Nigeria is described as a gas province with some oil in it. Nigeria’s natural gas reserves are largely unexploited.However, large quantities of associated gas are flared in the process of oil production. The Federal Government of Nigeria is currently implementing policies to reduce gas flaring by stimulating domestic gas utilisation. The major export gas in Nigeria is LNG. The Nigerian Liquefied Natural Gas Company Limited (NLNG) (Nigeria’s only operating LNG company), has six trains and is building the seventh. Other major LNG projects in different stages of development include the US$ 3.5 billion Brass LNG and the US$ 7 billion OKLNG project. Recently, a number of floating LNG projects have been proposed. Apart from the export of LNG, pipeline gas is being exported through the West African Gas Pipeline (WAGP) to countries in West Africa such as Togo, Benin Republic and Ghana. The Nigerian Gas Company (NGC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), is responsible for gas transmission in Nigeria through an unintegrated gas pipeline network. Current pipeline infrastructure comprises basically of two unintegrated pipeline networks totalling approximately 1,100 kilometres: the Alakiri-Obigbo–kot Abasi Pipeline, (the Eastern Network), and the Escravos–agos Pipeline System (ELPS), (the Western Network), and dedicated pipeline infrastructure owned by the NLNG and the NNPC/SPDC/Total joint venture. There are also local distribution companies such as Gaslink Limited and Shell Nigeria Gas, which distribute natural gas to major industrial areas in the western and eastern parts of Nigeria. The government has recently developed and is promoting the Nigerian Gas Master Plan (NGMP), which is expected to underpin the development of gas infrastructure, including central processing facilities and transmission pipelines in Nigeria. 1.2 To what extent are Nigeria’s energy requirements met using natural gas (including LNG)? A mix of energy sources is used to meet Nigerian energy needs. They include firewood (used predominantly as cooking fuel in the rural areas), hydro-energy, refined petroleum products and natural gas. Nigeria’s energy requirements are met through oil (64%), natural gas (27%) and hydro-electricity (8%). It is estimated that about 80% of natural gas utilised in Nigeria is used for power generation. The remaining 20% is utilised as industrial fuel in the cement, fertiliser, rubber, manufacturing, aluminium and steel industries. LNG is not used in Nigeria. Please Click Here to read full article. |
