Chineme Okafor in Abuja
The Nigerian National Petroleum Corporation (NNPC) has disclosed it is targeting the supply of about five billion standard cubic feet per day (bcfd) of gas to Nigeria’s domestic market, from which about 15,000 megawatts (MW) of electricity could be generated in the next three years.
It also said Nigeria was poised to provide as much as 10 per cent of the world tradable fertiliser in no distance time, producing between seven and 10 metric tonnes per annum (mtpa) of fertiliser and 5mtpa of methanol amongst other petrochemical products that could be produced with the 5bcfd of gas.
Speaking at the recent the 42nd Society of Petroleum Engineers (SPE) Nigerian Annual International Conference & Exhibition (NAICE) in Lagos, the Chief Operating Officer (COO) Upstream of NNPC, Mr. Bello Rabiu, said the country could leveraging its gas resources to diversify its economy from its overdependence on oil revenue.
Rabiu, noted there were seven critical gas development projects the NNPC was involved in, which when completed, would bring the domestic gas supply to a supply level of about 5bcsfd in the next three years.
He added, “With 5bcfd domestic gas supply, Nigeria will have sufficient gas to generate 15GW of power; 7–10mtpa of fertiliser; 10mtpa of other petrochemical; 5mtpa of methanol and 40mtpa of cement.”
He also explained that this was expected to result in the country’s gas market operating under a willing buyer – willing seller arrangement; ensure that up to five million jobs are created; grow Nigeria’s Gross Domestic Product (GDP) between $25 and $40 billion; and help her achieve import substitution worth $7 and $8 billion.
“Nigeria will become a hub for gas-based industries and net exporter of fertiliser, petrochemicals and methanol in a competitive global market, thus, generating foreign exchange earnings for the nation,” he explained, adding that, “Nigeria is now well positioned to supply almost 10 per cent of the world’s tradable fertiliser in a few years to come (Dangote, Indorama, Nagarjuna, and Brass).”
Also, NNPC’s Group Managing Director, Dr. Maikanti Baru, stated at the conference that the corporation’s decision to seek alternative financing models for funding its Joint Venture (JV) obligations has continued to restore confidence among investors and stimulate further Foreign Direct Investments (FDI) in industry.
Baru, explained that alternative financing has equally deepened local banks’ participation in the upstream sub-sector of the industry, adding that with sustainable funding, deep-water Production Sharing Contract (PSC) which currently accounted for 41 per cent of daily national oil production has risen tremendously.
According to him, to meet government’s expenditure and strategic focus, NNPC had to explore alternative financing, which he described as “important to the sustenance of the industry.
“To turn the wheel of the industry and ensure that funding doesn’t limit our growth, it is important we consider both the traditional and non-traditional funding options,” Baru stated.
He observed that traditionally, Nigeria had raised funds utilising equity or self-funding from cash-flow, commercial debt instrument or partner funding in form of Carry or Modified Carry Arrangement (MCAs).
He identified the non-traditional funding options to include contractor-financing or deferred payment, pension funds, private equity, Sovereign Wealth Funds, Export Credit Agencies (ECAs) and none-less Islamic and Sharia finance.
According to him: “There is need to sustain the industry for it to continue to deliver the much-needed revenue and provide the springboard for economic diversification. We must therefore keep the goose which lays the golden egg alive.”