Energy Sector in Nigeria and Across Africa Faces Existential Challenge of Urgent Need to Transit From Fossil Fuel Dependent Economy
In his Goodwill Message and Regulator’s Remark on the Theme Midstream address to Industry practitioners and stakeholders in the Nigerian Oil & Gas Industry at the 46th edition of the Nigerian Annual International Conference & Exhibition (NAICE) of the Society of Petroleum Engineers Nigeria Council, the Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, was of the view that the main theme of the conference “Balancing Energy Accessibility, Affordability and Sustainability: Strategic Options for Africa”, is apt and aligns with Nigeria’s goal on energy security.
The GCEO was represented by the EVP Upstream, Adokiye Tombomieye at the opening ceremony.
Kyari stated further that global energy transition and energy demand increases significantly, Africa as a continent, still grapples with energy poverty and security, where about 60% of the populace lacks access to energy and clean cooking fuel. The energy sector in Nigeria and across Africa faces an existential challenge of the urgent need to transit from a fossil fuel dependent economy to a decarbonized economy. “There is more to energy transition than decarbonization in our region as millions of people in sub-Sharan Africa still live or are living without access to electricity while some only have access to very limited or unreliable electricity. This is amidst old and insufficient infrastructure, growing energy demand with few energy sources, a vibrant young population and the list goes on. Economic prosperity is deeply dependent on energy access and consumption and as most of us know, this is the challenge for most countries in African.”
The NNPCL Boss added that currently, environmental sustainability is majorly driving the energy transition, but transition to a decarbonized system can only be successful if it simultaneously provides access to affordable energy, facilitates economic growth and development along with environmental sustainability.
Energy is the most critical enabler and driver required to develop, sustain, and grow national, regional, and global economic activities in its entire spectrum and will continue to be a major subject of strategic reviews at all levels of government, conferences such as this and organized private sector undertakings.
“You will all agree with me that Africa’s energy need for strong economic gain requires that energy be accessible to all, affordable and available in an optimally sustainable manner.
Africa has abundant natural gas reserves estimated at between 620 Trillion Cubic Feet (tcf) and is becoming the dominant energy source according to the Gas Exporting Countries Forum (GECF). Nigeria’s proven gas reserves is estimated to be about 206 TCF.”
This has the potential to unlock economic development and GDP growth for the country.
Natural gas has been globally recognized as transition fuel as it clearly offers a strategic competitive advantage to powering the continent sustainably through the creation of energy access for all in the short to- medium term.
Kyari pointed out that the Federal Government has declared year 2020 as the Year of Gas and the years 2021 – 2030 as the Decade of Gas. These pronouncements heralded the implementation of several midstream gas investment initiatives such as the Nigerian Gas Expansion Programme and Nigerian Gas Transportation Network Code. The Petroleum Industry Act (PIA) 2021 enunciates importance of the midstream sector of oil and gas industry as a critical tool and strategic driver for actualizing energy sustainability through gas development and utilization, creation of jobs and diversification of the economy.
He said Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is galvanizing the sector by addressing the trilemma of energy accessibility, affordability and sustainability by unlocking the full potential of natural gas which is the cleanest fossil fuel so far and has multiplier effects on all sectors of the economy, from agriculture, manufacturing, power, petrochemicals among others.
Natural gas has been incorporated in several policy documents such as the National Development Plan, Nationally Determined Contributions and Energy Transition Plan. All are stressing the importance of natural gas in the decarbonization journey. “Of recent we established the Decade of Gas Secretariat, at our Abuja office, which is tasked to develop an aligned plan involving key stakeholders in the public and private sectors to unlock Nigeria’s abundant gas reserves over the next 10 years.”
He spoke on the Nigeria-Morocco Gas Pipeline and Tran-Saharan Gas Pipeline are key midstream gas projects that when completed will place Nigeria as a major gas exporter to West Africa and Europe and build stronger ties between Nigeria, West Africa and Europe.
Continuing, Kyari said Petroleum Industry Act (PIA) has created the Midstream and Downstream Gas Infrastructure Fund (MDGIF), domiciled in the Authority – a key lever and enabler for de-risking investments in the midstream and downstream gas value chain. The MDGIF is to cater for the gap in gas infrastructure in many parts of the country and encourage local participation in gas-based industrialization aimed at deepening domestic gas utilisation.
“The PIA has created the Midstream and Downstream Gas Infrastructure Fund (MDGIF), domiciled in the Authority – a key lever and enabler for de-risking investments in the midstream and downstream gas value chain. The MDGIF is to cater for the gap in gas infrastructure in many parts of the country and encourage local participation in gas-based industrialization aimed at deepening domestic gas utilisation.”
Furthermore, the Authority has emplaced relevant regulatory frameworks for project monitoring to ensure emission reduction and decarbonization strategies are embedded into all projects from conceptualization in alignment to government’s commitment to a carbon-neutrality by 2060, Fugitive/Greenhouse gases (GHG) reduction by 2031 and, in the same vein eliminating gas flaring by 2030. We are also actively exploring and facilitating technologies that enable cleaner processing of fossil fuels for mandatory adoption industry wide.
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As the energy transition evolves, there is an opportunity to accelerate development across the gas value chain, providing a low-carbon bridge to a future of sustainable energy.
“The conference shall undoubtedly be very strategic for not just the Nigerian energy sector but Africa as well, in that all the key players in this critical sector of our economy are gathered, to review and establish profound insights into how the rich resourced base Nigerian energy sector can create the long outstanding strategic economic impact that is urgently expected of it.”
