Chevron’s Unrivalled Contributions to Nigeria’s Gas Devt

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SATURDAY POLITY

Chika Amanze-Nwachuku highlights Chevron Nigeria’s unparalleled contributions to the development of Nigeria’s vast gas resources 

The development of Nigeria’s vast gas resources has been one of the major policy thrusts of successive administrations in Nigeria.

To this end, the federal government, in 2015 made it a priority to unlock and harness the potential of the country’s gas resources to increase domestic and industrial power supply, raise living standards and support sustainable economic growth and diversification.

Government’s target was to ensure adequate gas supply to generate up to 15,000 megawatts of electricity to the power sector by 2020; stimulate gas-based industrialisation by positioning Nigeria as African’s regional hub for gas-based industries such as fertilizer; petrochemicals; methanol and gas export to high value and strategic foreign markets.

Nigeria has around 202 trillion cubic feet (TCF) of proven gas reserves plus about 600 TCF unproven gas reserves, making it the country with the largest gas reserves in Africa and the 9th globally, according to recent release from the Department of Petroleum Resources (DPR).

However, despite having the largest gas reserves in Africa, only about 25per cent or less of those reserves are being produced or are under development today.

Recently, the Nigerian National Petroleum Corporation (NNPC) said that it would collaborate with its joint venture partners to increase the amount of gas available to Nigeria’s domestic economy to about five billion standard cubic feet per day (5bscf/d) from about 1.3bscf/d currently. 

Chevron Nigeria Limited (CNL), the operator of the joint venture between NNPC and CNL ranks high among other corporate bodies that play leading role in gas development in the country. 

The firm’s huge contributions to the sector was further confirmed by the industry regulator, the DPR, which declared recently that CNL supplies about 40per cent of Nigeria’s domestic gas consumption and is one of the highest contributors of high quality domestic gas in Nigeria.

The company’s colossal investment in the Nigeria’s petroleum sector, particularly in the development of her gas sector, has earned it a lot of accolades. Little wonder in February 2018, at the Nigerian International Petroleum Summit (NIPS) in Abuja, it was awarded the Top Domestic Gas Producer and the Best Performing Upstream International Company in Social Contribution. 

Chairman/Managing Director of CNL, Mr. Jeff Ewing explained that the oil giant has contributed tremendously to the Nigerian government’s gas master plan through its various gas projects, pointing out that the company is the highest contributor of high quality gas to the domestic market in Nigeria. 

The CNL boss noted that through investments in gathering and processing of associated gas, routine flaring had been reduced by over 90per cent in the last 10 years in CNL’s operations. 

Ewing said, amidst the growing global trend in gas production and utilisation, expectations for the Nigeria’s gas sector remained high and opportunities for investment in the sector was quite huge. 

He listed the sector’s opportunities to include transitioning from an oil based economy to a more integrated oil and gas economy and end routine gas flaring; deliberate exploration for non-associated gas to support the Nigeria Gas Master Plan, with a focus on high liquid yield non-associated gas resources to optimise the gas development project economics. Other opportunities according to Ewing include removing constraints in the gas to power value chain to increase investor confidence, and Supporting and enabling competitive (“willing buyer – willing seller”) gas pricing model across the chain to enable stakeholders cover their costs and be guaranteed a return on investment.

The CNL MD recalled that the company’s gas story began with the implementation of different phases of the Escravos Gas Project (EGP), with four phases of development over the years. 

The EGP gas gathering and processing facilities, he further added, placed CNL as one of the pioneers in creating a practical and economic solution for gas flaring in the Nigerian oil and gas industry.  

He explained that the company’s Sonam Field development facility was designed to process natural gas through the EGP and was expected to deliver a total of 300 million cubic feet of natural gas per day to the domestic gas market and produce over 30,000 barrels of combined Liquefied Petroleum Gas (LPG) and condensate per day

The strategy, Ewing said includes ending routine gas flaring; boosting domestic supply diversifying and commercialising gas resources through Gas-Based Industries such as its Escravos Gas-to-Liquid (EGTL) Plant.  CNL works very closely with our JV partner (NNPC), pertinent government agencies and industry stakeholders to advance domestic gas supply. Very notable are the Gas Sale and Aggregation Agreement (GSAA) with Egbin Power Plc and, more recently with Dangote Fertilizer Limited, Ibeju-Lekki. 

Besides, Chevron is also supportive of Nigeria’s leadership in West Africa through our partnership with the NNPC in developing and operating the West African Gas Pipeline (WAGP), a 678 km pipeline that supplies gas to Benin, Togo, and Ghana as part of a broader initiative to develop the energy sector in the region. CNL is optimistic about the future of oil and gas business in Nigeria as the opportunities are expansive.

 Ewing, who restated Chevron’s commitment to Nigeria’s oil and gas sector, said the US oil major has been making significant investments in the country for over 50 years and “it expects to do so for many more in years to come”.

He said with the right policies, the vast potential of Nigeria’s oil and gas sector can yield even greater benefits.”