According to the Nigeria Extractive Industries Transparency Initiative (NEITI) the country requires an estimated $20 billion per year to revamp its gas infrastructure. NEITI Executive Secretary Ogbonnaya Orji revealed this at a policy conversation on Nigeria Decade of Gas initiative hosted by the African Initiative for Transparency, Accountability, and Responsible Leadership (Afrital), on Monday in Abuja. In 2020, the government announced the National Gas Expansion Programme (NGEP) to promote the widespread adoption of natural gas as a cleaner, more cost-effective energy source suitable for homes and industrial use.
Orji said Nigeria has over 200 trillion cubic feet (TCF) of gas reserves, making it the largest in Africa and the ninth-largest in the world, as per NEITI statistics. He elaborated on how NEITI stance lines up with the terms of the Petroleum Industry Act of 2021. Therefore, he advocated for the swift adoption of a national gas utilization policy that defines the distinct responsibilities of the industry, government, and investors. He remarked that this would unleash market-driven possibilities that would transform the gas ambitions into long-term economic growth. There must be significant and well-planned investments in the policy’s infrastructure for it to be effective.
NEITI suggested the government create a thorough gas policy.
Connectivity between upstream facilities, downstream processing, power plants, and other end users is an integral part to be considered. Due to the declining fossil fuel investment scenery, a new concept analysis indicating the government’s strategy for deploying gas infrastructure across the value chain is necessary. In addition, he stressed the importance of prioritizing the projects considering limited international funding and competing energy transition and development goals. Moreover, NEITI suggested that the government create a thorough gas policy, outlining the responsibilities of both government agencies and private companies, as well as setting regular standards to measure periodic performance.
He urged the government to give a direct independent evaluation of the risks linked with gas expansion to help mitigate negative effects, maximize positive ones, phase out oil and gas assets, and prepare for a post-oil and gas future. Furthermore, the government must create an industry-specific connection between the integrated gas policy and Nigeria energy transition policies, as well as an action plan built on a strong oversight and assessment framework to keep tabs on the policy’s progress. In addition, it has to implement an open, competitive, and transparent gas flare commercialization programme to put an end to gas flaring in the private sector.
$1 trillion needed to reach the zero-emissions goals by 2060.
Louis Ogbeifun, executive director of Afrital emphasized that several nations are moving away from using fossil fuels. He said in the near future, the country would need to grow its crude oil output above the existing level in order to have the resources to diversify and invest in other alternative sources. Ogbeifun stated that even in the medium and long-term period, the cleaner-burning natural gas that Nigeria posses in abundance is still categorized under fossil fuel. With this, he concluded that it is unrealistic to expect Nigeria to wean itself off fossil fuels anytime soon.
Utilizing gas as a sustainable energy alternative is a high-priority for Nigeria which requires significant investment. Ogbeifun estimates that Nigeria will need more than $1 trillion to reach its zero-emissions goals by 2060. Ogbeifun explained that the federal government is facing a lot of problems, the Naira depreciation against the US dollar, international funding drying up, and the expulsion of foreign interests from some parts of the continent are all causes for concern when it comes to funding the gas project efficiently and effectively. He also mentioned concerns with forex, financial availability by acreage owners and local investors, and the need to put an end to gas flares.
The country has become rich but yet a poor one.
Ogbeifun explained that Nigeria has exported minerals for years to make dollars to spend on consumption rather than saving, reinvesting in income, or generating jobs while also trading its raw resources for finished products. Yet, the country anticipates a different outcome in terms of foreign reserves, development, and economic prosperity. This pattern has led to the demise of numerous businesses, boosted employment in other countries while increasing unemployment and poverty in Nigeria. The comparisons highlight the paradox of being a rich country with enormous resources but yet, a poor country whose citizens lack access to essential well-fare benefits.