GoG News: Nigeria to Supply Gas to Equatorial Guinea
This Day (Lagos)
May 8, 2006
Posted to the web May 8, 2006
Onyebuchi Ezigbo
Abuja
Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Engr. Funsho Kupolokun, has said Nigeria might start the supply of about 600mmscf/d gas to her West African neighbour, Equatorial Guinea, by 2009.
Kupolokun, in a public lecture delivered at the Baker Institute for Public Policy, Rice University, Houston, Texas, USA, noted that the decision to venture into the deal was part of the strategies being pursued by the Federal Government to widen the scope of the market for Nigeria's abundant natural gas resources.
He said discussions on the details of the supply arrangement are ongoing, adding, "Heads of Agreement between the two countries is expected to be signed shortly".
The NNPC boss said the corporation is also planning to commence exploration and production operations in Equatorial Guinea in line with its corporate desire to internationalise the company's operations.
Highlighting current developments in the country's oil and gas sector, Kupolokun said tremendous achievements have been recorded since the Federal Government turned on a new policy to exploit natural gas potentials to economic advantage.
The Natural Gas Policy is aimed at promoting a public-private sector partnership for the orderly and rapid commercialisation of Nigeria's natural gas resources for the development and diversification of the domestic economy.
It is also aimed at recovering maximum revenue possible from gas utilization as the Downstream Gas Act addresses the legal, regulatory, institutional and policy constraints to investment in the Nigerian downstream gas sector.
According to him, tremendous progress has been made in the gas sector in the last few years, adding that Nigeria is growing LNG capacity rapidly and is on course to achieving about 30 per cent of total Atlantic LNG capacity by 2010.
He listed some of the projects in the sector to include the Olokola (OK) LNG project and Brass LNG project with 10 mtpa capacity.
Kupolokun said the gas sector is attracting new players, which will increase competition and stimulate more gas supply and utilisation system in the country.
"The foregoing is translating into a rapid evolution of the Nigerian gas sector. Not only is demand for gas expected to increase from 1.5 bcf/d to 15 bcf/d by 2010, gas flares are down to 40 per cent and will continue to drop, with a view to achieving flare out by 2008", he said.
He noted that "Nigeria's aspiration is aligned with global energy needs. It focuses on delivering significant capacity additions in both crude oil and natural gas".
He had at the same event disclosed that the Nigerian gas sector will generate $13 billion annually beginning from next year given the numerous gas projects on ground.
The gas sector currently generates between $6 billion and $7 billion per annum from domestic sales of gas as well as exports of Liquefied Natural Gas (LNG), up from zero level of income from the commodity in 1999.
"The gas sector is now being prioritised to generate as much revenue as was being made from crude oil exports currently," Kupolokun said.
According to him, Nigeria is well positioned to take the lead in the international gas market and that gas will rival or overtake oil very soon given its anticipated 25 per cent annual growth rate.
He said a lot of efforts were on to monetise the nation's huge gas reserves put at 184 trillion cubic feet (tcft) through world-class gas utilisation projects.
Kupolokun told his audience that tremendous progress had been made in the gas sector in the past few years with the NLNG delivering five LNG trains to consumers in Europe and America from 1999 to date.
He said gas demand and consumption in Nigeria will hit 15 billion cubic feet daily by 2010, up from the current demand of 1.5 billion cubic feet per day.
Beside the increased earnings from gas, Kupolokun said a lot of jobs were being created from all the gas projects in line with the nation's desire to attain the Millennium Development Goals (MDGs) by the turn of the decade.
AI
