Nigeria approves national gas plan

Nigeria’s cabinet has approved the national gas policy which should help the country broaden its economy beyond oil.

The petroleum ministry said on Wednesday that the gas policy would form appropriate institutional, legal, regulatory and commercial framework for the gas sector, and remove the barriers affecting investment and development of the sector.

Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said Nigeria needed major changes in policy to make gas a hub of the Nation’s economy.

He said there was a need to have a stream of revenues between petroleum and gas in order to see an improvement in the Nation’s economy and leverage on opportunities for gains from the oil and gas sector.

The gas policy will look to establish a single independent petroleum regulatory authority, separate upstream from the midstream, and separate the respective roles and responsibilities of government and the private sector.

The approved document – of some 100 pages – states Nigeria will strive to make an environment that encourages exploration specifically targeting gas.

It will also encourage exploration and development of new gas supply sources from the inland and offshore basins; develop portfolio management methodologies to prioritize low-cost gas development; clarify gas terms for PSCs; achieve gas flare-out through gas utilization projects utilizing mature flare reduction technologies; and produce a gas Resource Management Plan.

Asia Pacific was the major market for Nigeria LNG in 2015. However, the country expects its LNG to struggle for for market penetration there in the future, with two major exporters Qatar and Australia and their huge new volumes about to supply the same region. To remind, Qatar has this week said it will boost its LNG production from 77 million to 100 million tons per year with the new volumes from its giant North Field, located in the Persian Gulf.

Australia, for its part, has been home to several giant offshore gas projects, developed or under development, such as Gorgon, WheatstonePrelude and Ichthys.

Nigeria sees itself as “naturally an Atlantic basin supplier,” however the country expects its LNG exports to face challenges due to an over supply in some regions, and the lack of demand in others.

The document suggests that “perhaps Nigeria could help develop and then supply African gas markets with LNG and pipeline gas. The West African Gas Pipeline (WAGP) could be extended further west to neighbouring countries; gas pipeline connections could perhaps be made to Cameroon (although Cameroon has its own domestic gas reserves which are right next to the main industrial markets); or Nigerian LNG could be taken to other markets along the west African coast.”