Nigeria unveils multi-billion dollar gas sector investments
Abuja (Platts)--24Mar2011/228 pm EDT/1828 GMT
Nigerian President Goodluck Jonathan Thursday unveiled foreign
investments amounting to billions of dollars in the country's gas sector as
part of its much-vaunted plan to harness more of its abundant gas resources.
In total, Nigeria's plans to increase supply and use of gas in the
country are expected to involve total investment of some $25 billion, Jonathon
said as he disclosed details of the projects involved at a ceremony in Abuja.
One of the key projects in the scheme involves Italy's Eni and Nigerian
energy company Oando, which have agreed to invest $3 billion on a gas
processing plant in the Niger Delta, he said.
The gas plant is to be built in Obiaruku in southern Delta state and is
due to be completed in 2012.
Nigeria hopes to end completely the current widespread practice of
flaring associated gas produced at the country's oil fields and to raise
domestic gas supply to over 10 Bcf/d by 2020, up from the current level of 1
Nigeria has long touted its plans to stop wasting its gas riches, but
previous deadlines for oil companies to end gas flaring have all been missed,
with the multinational companies that produce the bulk of the oil blaming
Nigeria's poor funding of its share of joint venture projects as well as
security challenges in the Niger Delta.
The foreign oil companies have previously proposed 2013 as a more
realistic date for eliminating gas flaring.
Thursday's announcement by Jonathan differed from previous government gas
initiatives, however, because of some of the specific details it contained.
As well as the Eni/Oando gas processing plant, the president said Nigeria
had also signed an agreement with Saudi Arabia's Xenel Industries to build a
petrochemical plant in the Niger Delta with production capacity of about 1.3
"[The projects] mark the beginning of [Nigeria's] journey into the league
of nations which have successfully leveraged...their abundant natural gas to
positively impact the lives of their citizens," Jonathan said.
"It is our expectation that by 2013, we would have positioned Nigeria as
the regional hub for gas based industries of fertilizers, petrochemicals and
methanol," the president said.
India's Nagarjuna Fertilizers and Chemical Ltd. is expected to team up
with US-based Chevron to build a fertilizer plant in Nigeria that will use a
substantial volume of the country's huge gas resources, he said.
"This agenda is expected to bring an end to gas flaring as we hope to
monetize this," he said.
Jonathan commended the investors from Saudi Arabia, India, Italy and the
US for buying into the Nigerian "gas revolution."
"Your decision to invest in Nigeria testifies to the confidence you have
in our vision and faith you have in our country," he said. "Your commitment
will no doubt serve as a challenge to other investors elsewhere, letting them
know that Nigeria is indeed open and ready for business," he said.
Nigeria has proven gas reserves estimated at 187 Tcf and further
undiscovered potential of about 600 Tcf, Jonathon said.
According to BP's statistical review of world energy, Nigeria's gas
reserves amounted to 185.4 Tcf at the end of 2009, the biggest in Africa. The
country's production of 24.9 billion cubic meters, however, was well short of
both Algeria (81.4 Bcm) and Egypt (62.7 Bcm).
Nigeria launched a gas master plan in 2008, under which oil companies are
required to make available a certain percentage of their gas production to the
domestic market for electricity generation and fertilizer plants.
Jonathan said the government expected that full implementation of the gas
master plan would create more than 500,000 new jobs.
In 2009, Nigeria shortlisted 15 firms including Russia's Gazprom, E.ON
Ruhrgas of Germany and Shell, to build three major gas processing facilities.
Also speaking at the event, Nigeria's oil minister Diezani Alison-Madueke
said that in order to grow the gas the country's gas potential, the government
was looking to tap the hydrocarbon potential of other inland basins in
addition to reserves in the Niger Delta and offshore fields.
Nigeria she added, would spend $1 billion on oil exploration campaigns in
the Chad, Gongola/Yola, Sokoto and Anambra basins, as well as the Benue Trough
over the next five years.
The government expected the projects unveiled Thursday to result in
direct foreign investment of more than $10 billion between 2012 and 2014, the
--Staff reports, email@example.com