Amid $1b legacy debts, Nigeria pushes for $12b revenue, 10 gas FIDs

Nigeria is pushing to offset about $1 billion gas legacy debt as stakeholders in the industry raised hope of a $12 billion investment and 10 Final Investment Decisions (FIDs) in the next one decade.

The Federal Government, while unveiling a new secretariat to propel gas policy, said there is need to improve investor confidence, guarantee return on investment and provide infrastructure support of about $1.6 billion.

While payment of historic gas debt incurred in the power sector remains a key priority on the 10-year gas agenda, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said the Presidency is reviewing a new gas template.

Built on the premise that gas is a key driver of economic growth and development, Ahmed expressed government’s readiness to increase domestic consumption and grow the export market.

He noted that the move would see natural gas production increase from 8.0 billion cubic feet in 2020 to 122 billion cubic feet in 2030, if high case supply is achieved.

Faced with a looming gas supply crisis, with a potential shortfall of 3.1 billion cubic feet, stakeholders said the gap could be addressed by delivering, at least, 10 gas supply projects by 2030.

Former President of Nigerian Gas Association and Coordinator of the Decade of Gas Secretariat, Ed Ubong, said the gas legacy debt in the country stands between $700 million and $1 billion.

By clearing historical arrears owed gas producers and ensuring the arrears do not resurface, Ubong said the sector would build investors.
He said: “We will see 10 to 16 projects from the industry that can bring to the surface about 3.1 BCF of gas in the short term. In addition, there’s an additional 2 BCF if we have the right policy framework.

“A lot of work has been done. The projects themselves have been identified. We are now in the process of meeting with each operator to bring those additional volumes to the surface.”

Meanwhile, Nigerian National Petroleum Company Limited (NNPCL), yesterday, in Abuja said about $18 billion may be invested in the oil and gas sector from now through next year.

Speaking at the Nigerian Oil and Gas Conference, in Abuja, the Chief Upstream Investment Officer of NNPCL Upstream Investment Management Services (NUIMS), Bala Wunti, said the country is attracting more investment and decisions are being taken on key projects.

At a panel session, titled, ‘The Investors Perspective: Assessing the Attractiveness of Nigeria’s Energy Sector’, Wunti said the country is working to broaden local content, and that developing capacity in the upstream industry is non-negotiable.

“He said: “About four days ago, Total, in partnership with NNPCL, launched tender for project. That tender will rake in foreign direct investment. SNEPCO is about to take a final investment decision on Bonga, and that will also give us an investment in the neighbourhood of $4 billion. Going back to total, we are restarting the Preowei project, and we expect about $2 billion investment.”