Transcript Delivering on the Natural Gas Promise

Delivering on the Natural Gas Promise to the Nation
by
Dr. Maikanti K. Baru
Group Managing Director
Nigerian National Petroleum Corporation (NNPC)
at
10th International Gas Conference and Exhibition
October 31st, 2016
Nigeria Gas Master Plan Aspirations
- 3 Point Strategic Focus
Create a framework that
balances the nation’s
domestic and export of gas
objectives optimally
Develop infrastructure
delivery systems for the
domestic market
Develop a commercial
framework for domestic
gas market
Gas Master Plan
Key Enablers
• Develop infrastructure delivery
systems for the domestic
market;
• Develop a commercial
framework that underpins
domestic gas market
Growing the Nigerian
Economy with Gas
The Promise
• Achieve deliverable generation
capacity of 15,000MW by 2025
• Achieve zero flare by 2020
• Increase domestic gas monetization
to 5bscfd by the year 2020.
• Potential creation of over 5.5m jobs
and GDP growth of over $23bn.
The Achievements: NLNG
4.68Tcf
Gas Monetization
Local Content and
Domestic Industry
Impact
Job Creation and
Community
Development
of Associated Gas
Converted to LNG and
NGL
Established
$1bn
NLNG Local Vendors
Financing Scheme
Employed 1200
Nigerians and routinely
engage ~500
Community Youths
Source: Thisday newspaper, march 16, 2016
Paid
$21bn
to feed gas suppliers
since inception
$10.7bn
Total investment inclusive
of $5.5bn Foreign direct
Investment
~350,000 Ltrs of paint,
130,000mtrs of LV
cables,9,000 pieces of
sacrificial anodes exported
for use in BGT ship
Employed 194 Nigerian
officers and 364 ratings
on NLNG Ship
Management Ltd
~ $46bn
Revenue to Govt. in the
last 16 years.
250,000 MT of LPG
per annum supplied to the
Nigerian Market
Provide power to 11,700
households in Bonny
Community
The Achievements: Power and Gas-Based Industries
Domestic gas supply has grown from 100mmscf in the 70’s to 1.4bscf in Jan 2016
Gas Supply to Power Plants has
Gas to Power
Gas Based
Industrialization
380mmscfd in
2010 to 850mmscfd in 2016
grown from
Can sustain generation of about
5,000MW
About
157mmscfd
1.3 MTPA of
Urea production
thermal
energy today
About
of gas supply
of
Gas Supply increased from
185mmscfd in 2010
to 350mmscfd in
2016
The Achievements: Gas Infrastructure
Steady progress has been made in delivering the critical pipeline infrastructure
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Oben – Geregu
 36” x 136km; from Oben to Geregu
 Project completed in Nov ‘11
 Addresses supply deliverability to Geregu power plant and future
expansions
Central Processing Facilities
(CPFs)
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 WEND: 2.4 Bscf/d capacity
 OB/OB CPF: 1.2 Bscf/d capacity
 Pre-FEED for WEND CPF completed in
2014
 Feasibility Studies for OB/OB CPF
completed in 2012
 Work ongoing to optimize locations for quick
win CPFs
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3 ELPS 2
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Trans Nigeria Pipeline Project
(TNGP)
 36”/40” x ~ 1500km
 Route and Geotechnical survey currently
ongoing for AKK
 AKK EPC tender evaluation process ongoing
 Execution strategy for QIT to OB/OB EPC
under consideration
 Odidi – Warri expansion project
ELPS A
 24”/30” x 104km;
 Project has been completed
 Addresses stranded gas in
Escravos
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36” x 324km;
Contract awarded in October, 2008
Doubles ELPS capacity to 2.2bcf/d
Project is ~ 94% complete
Enable expanded supply to support
all future power and industry
expansion in the west
Obiafu/Obrikom - Oben (OB3)
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

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48” x 132km;
Contract awarded in April 2012
Connects East to West and North supplying 2Bscf/d
Construction Works on-going Lot A & B Overall ~
76% completed.
Furthering the Promise: Power Generation Case Study
20 GW of Power by 2025
Power Generation
20GW Power
Generation will
contribute ~$511bn of GDP
Growth
Power Transmission
Power Generation
Jobs Creation
• ~12 -15 additional
• ~5.5 million ,
Power plants
Nationwide
Power Distribution
Import Substitution
• ~$7-8bn Annually
Infrastructure
• Additional Power
transmission and
distribution lines
across the country
Ogidigben FTZ
Infrastructure Development & Urban Development
Objective
▪ To develop additional Phase 2
infrastructure at the FTZ and
provision of urban area
development
Project Scope & Parameter
▪ Sand filling of about 2000HA, intra park
▪
road (about 10km) and storm drainage
Housing estates and associated
infrastructure
– Hotels, Schools, Shopping Malls and
recreational facilities
Proposed Ownership
▪ Developer will be the exclusive
Operator of the FTZ
▪ Revenues from charges to FTZ
tenants in form of annual lease
payments and other service
charges
▪ Revenue from urban
development through rentals,
leases or sale
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Furthering the Promise: Industrial Park Case Study
Gas Revolution Industrial Park (GRIP), Ogidigben is a critical component to operationalize the Gas Master
Plan
Petrochemical plant
FTZ base infrastructure
Central processing facility
Port infrastructure
Power Generation
• 1000 MW Power
GRIP will
contribute
~$23bn of GDP
Growth
Plant
Fertilizer plant
Power plant
Jobs Creation
• 150,000, at peak of
construction
• 5m, across the
country when
completed
Real Estate development
Other support services
Products Range
Infrastructure
• 2.5MTPA Fertilizer
• 1.3MTPA
• Deep Sea Port
• Integrated Fiber
Polyethylene
• 400 KTPA
Polypropylene
• 1.8MTA Methanol
• Secondary Industries
output
Optics Network
• ~5000 Housing units
• Metropolitan Roads
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Critical Success factors for Realization of National Gas
Promise
Policy and
1 Regulation
▪ Clear policy and regulatory framework to ensure gas availability for domestic uses (PSC
gas terms, flaring, upstream use)
▪ Clear mid-stream commercial regulatory framework around tariffs and open access to gas
infrastructure
▪ Sector Pricing Policy to cater for both domestic and export markets
Investing in
2 critical
infrastructure and
gas projects
3
Monitor gas
availability
4
Strengthen
capabilities
▪ Complete the National gas backbone infrastructure
▪ Invest in processing facilities and other midstream and downstream gas projects
▪ Constantly monitor Nigeria’s gas balance (via domestic gas aggregator) to ensure gas
availability to strategic sectors.
▪ Strategically review and ensure compliance to domestic gas supply obligations
▪ Strengthening the capabilities of a task force on gas to coordinate realisation of plans on
gas development and infrastructure and gas utilisation projects
▪ Develop and implement gas education and technical training plan to provide needed
capabilities for a vibrant gas industry
Conclusion
 The Gas Industry in Nigeria has made progress in the delivery of its promise to the
Nation
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Generated over $50bn of revenues to the Nation principally through NLNG
Supported daily generation of up to 5GW of power
Delivering gas to fertilizer plants
Supplying CNG to over 10,000 cars and Dangote trucks
Supplying about 400mmscf of gas to industries and commercial concerns
Created millions of jobs
 Despite the modest progress made so far, there is still huge untapped potential for
growth in the gas sector
 It is my expectation that this Conference will deliberate extensively on the strategy and
collaboration between the government and all players across the gas value chain to
unlock the potentials of the industry
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