Seplat Petroleum Development Company Plc, leading indigenous energy company, has identified its fast-growing gas business as a strong catalyst for sustainable development in Nigeria.
Mr. Roger
Brown, Chief Executive Officer, SEPLAT, described this drive as a revolution,
indicating that the direction is laudable and highly rewarding to the Nigerian
people and the economy at large.
Brown said
this at the Nigerian Gas Association (NGA) Industry Multilogues 2, its 12th
biennial International Conference themed “Powering Forward: Enabling Nigeria’s
Industrialisation Via Gas” held virtually.
Speaking on
the company’s contributions to the Nigerian Gas industry, Brown said: “Our new
Sapele Gas Plant processing capacity (PC) is 75MMscfd, increasing PC in the
West to 540MMscfd (Oben and Sapele).
“SEPLAT
currently contributes about 30 per cent of gas to power generation in Nigeria.
Its ANOH Project is to add 300MMscfd capacity and unlock over 1,200MW of gas
constrained power generation capacity.”
He,
however, stressed the need to build institutional capacity to drive and sustain
the transition, which is critical to attaining value and wealth advancement.
The SEPLAT
CEO also called for the need to drive investments through liquidity pools such
as the capital markets, bonds and PFAs as well as exploring a myriad of
financing options to provide funding for gas infrastructure projects.
Brown,
during his panel session dubbed “Nigeria’s Decade of Gas: The Industry
Leadership Outlook”, said SEPLAT is strategically positioned to access
Nigeria’s main demand centers, with its current well stock delivering 300 –
350MMscfd (Gross).
With
respect to the company’s industry strides, it was, at the event, also honoured
with the NGA Special Recognition Award for SEPLAT’s strong and outstanding
support in its service to the Nigerian Gas Industry and the Nigerian Gas
Association.
Commenting
on some of the challenges bedeviling the gas-to-power drive, the SEPLAT CEO
said capital intensity; under-investment; delayed delivery of planned gas
infrastructure; poor pipeline network; lack of cost reflective tariffs and huge
debts in the power sector; lack of clear gas fiscal terms for PSCs and delay in
passage of the Petroleum Industry Bill (PIB), amongst others, were issues to be
addressed.
Commending
SEPLAT and other players for their dedication to the growth of the sector,
Audrey Joe-Ezigbo, President, NGA, said there is the need to continously
project and leverage the potentials of gas towards enabling and reinvigorating
Nigeria’s industrial sector.
“Riding on
the declaration by the Honourable Minister of state, Petroleum Resources,
Timipre Sylva, to dedicate the new decade to the promotion and adoption of
Natural Gas as the fuel of choice for national growth, it has become imperative
for us to reinforce this paradigm, leveraging its benefits across diverse key
sectors in Nigeria and across Africa.”
The
Nigerian National Petroleum Corporation’s Group Managing Director, Mallam Mele
Kyari, in his address, said the Corporation was committed to fulfilling
President Muhammadu Buhari’s directive to boost domestic gas supply.
Represented
by the Chief Operating Officer, Gas and Power, Mr. Yusuf Usman, Kyari stated
that progress was being made on several of the projects, including the NLNG
Train 7, with a foreign direct investment of between $3 billion and $5 billion;
and the ANOH gas project, with a fully completed financing arrangement.
He listed
others as the AKK, which he described as one the largest and most aggressive
gas infrastructure that has ever been embarked upon in Nigeria, stretching 614
km from Ajaokuta, Abuja, Kaduna and Kano, and Lot B of the OB3 gas project,
which is already producing 125 mmscfd of gas.
In his
address also, the Lagos State Governor, Mr. Babajide Sanwo-Olu, harped on the
need to have a cleaner, more liveable environment, noting that he is planning
well for the state’s huge population, guaranteeing green jobs, reducing carbon
emissions and working towards a healthy environment.
Sanwo-Olu
maintained that there was the need to boost domestic utilisation of gas, adding
that Lagos set up the Ibile Oil and Gas, privately driven, to transition the
state to a low carbon economy by taking out firewood, kerosene and all the
dirty fuels.
Seplat has
numerous opportunities to scale up and diversify, some at relatively low cost.
The company has significant opportunity to lead Nigeria’s strategic dash to
gas, replacing inefficient diesel and petrol generation, benefiting economy
with multiplier effects on gas demand.
According
to Brown, gas offers higher profitability and cash drop-through than oil owing
to lower royalties, taxes and costs; of which gas revenues are independent of
oil price volatility, with 10+ year contracts offering long-term visibility.
He
explained: “ANOH could increase gas production by 300MMscfd, with potential for
further expansion. There is the potential to increase production at existing
Oben and Sapele plants; and to service industrial gas needs at prices higher
than fixed-price Domestic Supply Obligation.
“The potential to end flaring and monetise gas by-products and develop LPG products for local market to replace biomass as cooking fuel abounds.”
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