NLNG: With Decade of Gas Plan, Nigeria Can Catch Up with Industrialised Nations

•Says plan requires FG to commit about $2bn initial funding annually  

•Urges next govt to stick with initiative on assumption of office

Peter Uzoho in Abuja

The Managing Director/Chief Executive Officer of the Nigerian Liquefied Natural Gas Limited (NLNG), Dr. Phillip Mshelbila has expressed optimism that Nigeria’s Decade of Gas policy would enable the country to catch up with the developed and industrialised countries of the world if successfully implemented as planned.

Mshelbila, also explained that implementing and realising the ambitious decade-long gas plan would require strong collaboration of all stakeholders and would need the federal government to make initial funding commitment of between one to $2 billion every year to support the project.

The NLNG boss stated this yesterday, in Abuja, during his keynote presentation at the 13th International Conference and Exhibition organised by the Nigeria Gas Association (NGA), with the theme: “Ensuring the Realisation of Nigeria’s Decade of Gas.”

The NGA conference was subsumed into the sixth Nigerian International Energy Summit (NIES), holding at the International Conference Center (ICC), Abuja.

Mshelbila, who highlighted the importance of the Decade of Gas agenda to Nigeria’s push for economic growth and industrialisation, however, appealed to the in-coming administration not to disrupt the plan but stick to it and drive it to full implementation.

The Decade of Gas agenda is ambitious programme of the federal government launched in 2021 by President Muhammadu Buhari and the immediate-past Minister of State for Petroleum Resources, Chief Timipre Sylva to help Nigeria achieve industrialisation, economic prosperity and tackle energy poverty by using gas as an enabler.

The programme is being powered by the government in conjunction with a broad team of stakeholders from the Nigerian oil and gas industry and other linkage sectors. 

Nigeria currently boasts of having about 209 trillion cubic feet (tcf) of natural gas reserve and ranks as the ninth world’s largest gas nation by reserve, but the country is only able to produce between seven to eight billion standard cubic feet per day (bscf) of gas.

While many gas nations of the world have successfully used their gas potential to develop, industrialise and tackle unemployment, economic and energy poverty challenges, Nigeria is still wallowing in all forms of underdevelopment.

Nigeria, Africa’s largest nation by population and natural resources is still grappling with acute energy poverty, hunger and starvation, massive youth unemployment, lack of quality education and healthcare, and alarming infrastructure deficit despite its huge oil and gas resources.

According to Mshelbila, the Decade of Gas agenda has a more detailed plan and was so crucial to Nigeria achieving the expected future for all Nigerians.

With the initiative, he said Nigerians now have the opportunity to take control of their destiny, describing the plan as probably the most comprehensive plan the country had put together to date.

“And the reason is because in putting together this plan, we have gone back in time and looked at every other plan that was developed in the past. And we’ve taken the valuable elements from those ones, and then looked at today’s reality, which includes things like the energy transition and put together a plan that we believe is indeed the single most comprehensive plan.

“We realised that if we don’t act now, the social acceptability of what we have traditionally done is waning. Funding for the types of activities that we have traditionally done is disappearing”, Mshelbila said.

Unfortunately, he said Nigeria had already lost three years out of the 10 years’ plan, maintaining that with the need to also address the environmental pressures, the programme now has about seven years left in the window, with a change in administration now waiting to happen.

“The key promoters who launched this are on their way out. We will have a new administration, but we cannot afford a disruption in the plan. And so the biggest challenge that we have is to ensure that this plan remains on track and is also implemented as plan,” he noted.

He some countries had used gas to turn their fortunes around, pointing out that the United States deployed technology that completely changed the gas industry through fracking, which was enabled by the use of gas.

While Qatar, which has one of the biggest reserves of gas in the world has now gone into an expansion project that’s going to take them from 77 million tonnes per annum (mtpa) of LNG export to 126mtpa, Mshelbila argued that Nigeria, through the NLNG, was just trying to ramp up its LNG supply to 30mtpa though the Train 7 project.

However, with the Decade of Gas, he said Nigeria has its own plans to achieve development like Quatar and the rest, noting specifically that, “we do have our own plan. And we can catch up with these countries that are doing these tremendous and amazing things.”

According to him, the Decade of Gas was ambitious, but achievable, adding that the agenda focused on four pillars, had looked extensively at the demand side and where the demand was going to be by 2030 or 2050.

Mshelbila explained, “It’s looked at the demands across all of the different sectors. It looked at the supply side and then looking at the supply side not just on weaving around reserves to under TCF and so on, but actually gone to the level of identifying what are the 10 key projects that if unlocked, will ensure that we achieve our objective within the decade.

“So, it’s down to specifics for each of these 10 projects. The intent is that the key stakeholders for each of those projects will sit down with all the relevant stakeholders: be it Ministry of Petroleum, Ministry of Finance, the regulators, particularly Nigerian National Petroleum Company Limited and all of the different stakeholders that are necessary to enable those 10 projects to happen.

“And the specific tailored plan will be developed and agreed and put into implementation that’s been defined. We’ve also identified what infrastructure is needed to connect supply and demand. Some of them are in play as has been mentioned. Because the AKK is under construction already, but there are a number of others that need to happen and need to happen quick.

“If this is to work. The key ones have also been identified. We have an idea of the costs and there’s an understanding that government needs to lead. But there’s a recognition that government cannot fund everything itself.”

Within the plan, he said the federal government would put down, “an initial one to $2 billion every year, on top of which, it can attract counterpart funding from the private sector. So the whole funding aspect of it is also understood.”

Fourthly, he the plan had also looked at the commercials, which were very essential and had looked at the pricing, with regards to how to move from the current regulated gas pricing regime to a cost-reflective pricing, all the way to a market-led or market-driven pricing system.

Also, within the period of time, the NLNG boss said the stakeholders had worked out a schedule that looked at actions that needed to be taken in the first six months, first 12 months, first 24 months and had subsequently led to a detailed schedule with milestones and other key elements.

He further explained, “There’s a governance that’s been put in place that has the Minister of State for Petroleum leading. It has sponsors that cut across industry, including the regulators and all those who need to be at the table.

“There are various project streams led again by multidisciplinary teams across the industry. All is set. Three years have gone and we have continued with piecemeal implementation of little parts of it. And yes, certain things are happening but the coordination is not there. The speed and urgency is not there. And most importantly, having all of the stakeholders coordinating in putting this together.

“The actual implementation is something that we’re still waiting for. There is one piece and I must add this, which is missing from the decade of gas and that is security. That has not been included in there. But it is also an essential piece that needs to happen.”

More so, he said security in the Niger Delta was also another important element of the Decade of Gas Plan that must be addressed, especially the issue of crude oil theft.

“That, in addition to all that we currently have in the plan is what we need to transform not just our gas industry but our economy as a country.

“The project has support across board, it started out with NLNG sponsoring the work and the development of the plan,” he noted.

With the programme now at the implementation phase, Mshelbila maintained that all the different stakeholders represented in different ways were now supporting financially and otherwise and that it was an indication of commitment for Independent Petroleum Producers Group (IPPG).

As the new administration is about to assume office, he warned that they should not consider tinkering with the policy or starting a new one since everybody was behind it and that all that the policy needs now was for it to be implemented.

Mshelbila concluded, “And so, I believe that we’re spending today to deliberate on this decade of gas. Because it is important that as key stakeholders, we understand it and we also support it. And we also ensure that we’re not going back to the days where every 10 years, we’re either doing gas master plan, we’re doing this other plan, that other plan.

“We have it and so my appeal to those who have the ears of the incoming administration is to come in and settle down quickly. “Let us simply pick this up and run with it. This is probably the best example of public private partnership that we can ever have in this country. This is how we can secure the future economy of Nigeria.”