Minister backs Nigerian gas despite calls to curtail fossil fuels
Despite calls for Nigeria to move away from fossils fuels on its path to net zero, the country’s power minister has called for increased Nigerian gas investment to unlock power sector potential.
Nigeria’s Minister of Power, Adebayo Adelabu, said this week at the 23rd Nigeria Oil and Gas (NOG) Energy Week that increased investment in gas development is needed to unlock the full potential of the country’s power sector and achieve its energy transition plan, raising concerns over Nigeria’s climate credentials.
Adelabu emphasized that the domestic power sector consumes the largest share of Nigerian gas supply. He said that a secure, sustainable and equitable energy transition is needed to address the industry’s challenges and ensure limitless potential in achieving energy security and sustainability in Nigeria. International pressure on Nigeria to transition away from gas as a bridge fuel is however increasing.
“Without gas, it’d be tough for our energy output. That is why we have to balance climate regulation and energy expansion. A lot of investments still have to come into the gas sector to have adequate and affordable gas supply to the Nigeria power sector,” said Adelabu.
He said that the domestic gas-fired power market accounts for 60 percent of total domestic gas supply. At the moment, he said gas quantity currently stands and sustains Nigeria’s four gigawatts average grid generation capacity.
“This is fast moving to five gigawatts as specifically on the third of May when we hit 5,000 megawatts of energy output in Nigeria. We produced 4,800, 4,900 megawatts. In line with the Nigeria energy transition plan vision 30-30-30, which seeks to achieve 30 gigawatts in the year 2030, our energy mix is projected to be 70 percent, which is 21 gigawatts, that’s 21,000 megawatts.
“The power sector would require over five times what the industry currently utilises from the domestic gas. If we need this much, additional investment will be needed to achieve this level of gas supply without compromising the export obligations that we have in the industry. To this end, I want to call on the investors here today, to strongly consider the investment needed in gas supply production in the country, especially our abundant unexploited non-associated gas reserves,” he added.
Adelabu restated that the power sector requires huge funds that the government cannot afford to fund alone. He said the cooperation, collaboration, support, and partnership of private sector investors both locally and offshore is needed.
“We must be able to give them that trust that if they bring money here, they’ll be able to recoup the investment and there’s a possibility of enough profit on their investments. I’m confident that the federal government of Nigeria is committed to ensuring a viable and a bankable power source. All we’re trying to do is to change the narratives and paint a new picture of the industry so that everybody would be eager to put their money into investing in the sector,” he ended.
Nigerian gas sector challenges
Nigeria’s Special Adviser to the President on Energy, Olu Verheijen, during her conference address noted that the challenges and solutions in the oil and gas sector are known. She urged key stakeholders in the sector to move from theory to implementation.
“Gas must deliver for the people of Nigeria. And our current economic struggle is posing an extra obligation on us collectively, to leverage on that solidarity, to enforce collaboration, and to ensure that gas finally delivers for the people of Nigeria.
“The Federal Government of Nigeria has been phenomenal in demonstrating support for the gas sector, in this regard the executive orders. The executive order translates the resolution of government to act in a practical dynamic manner to remove the impediment to investment.
“In the Nigerian National Petroleum Corporation Limited (NNPC) we have what is called partnership for value, partnership for prosperity. Our current model is creating values for partners. And our areas of value is versatile and extensive.
The other feedback is that gas has proven to us all that it is a resilient product apart from being a super commercial product. We have actors who got carried away with the clean energy song and dance and said gas is gone,” she added.