More jobs will be created through the implementation of the Natural Gas Expansion Programme (NGEP), Midstream and Downstream Gas Infrastructure Fund and Domestic Gas Delivery Obligation policies of government.
Chief Executive Officer of the Upstream Petroleum Regulatory Commission (NUPRC), Engr Gbenga Komolafe stated this in his keynote address at the maiden PENGASSAN annual conference.
Komolafe said these policies would spur investment to expand the critical gas infrastructure that would entrench Nigeria as a gas hub in-Country, across Africa and eventually Europe.
He said some major in-Country projects including the 614km Ajaokuta-Kaduna-Kano pipeline would supply gas for power, domestic use, and industrialisation along the Northern corridor; the Escravos to Lagos Pipeline-2 would supply gas for power, domestic use, and industrialisation along the South-West corridor; the Obiafu-Obrikom-Oben (OB3) pipeline will supply gas for power, domestic use, and industrialisation along the South-South corridor.
He said the LNG Train 7, the OCP-NSIA ammonia plant in Akwa Ibom State and Nigeria-Morrocco pipeline aim to utilise the nation’s rich gas resources to meet customer demands across Africa and Europe, adding that this would invariably lead to the creation of more jobs in-Country.
“Having identified rapid population growth and the need for industrialisation as the enablers that will drive demand for energy across Nigeria and Africa, it is important to share our perspective on another enabler that will be affected by the energy transition – which is access to capital pools.
“Innovative approaches will have to be developed to attract investment to the oil and gas industry during this time of energy transition. What is paramount at this time is for the nation to weigh her options and strengthen the resilience and sustainability of our resource base in other to build robust positions in the new energy businesses of the future.
“Consequently, our position on the hydrocarbon cost curve is very important as this is a pointer to the competitiveness of our supply given the global nature of oil and gas demand and supply dynamics.
“Equally, our local content regulations must aim to strike an appropriate balance between building local-industry capacity and reducing costs. Fortunately, the PIA 2021 provided new fiscal terms that would act as a lever to strengthen and optimise cost competitiveness in Nigeria.
“Still, we need to address sources of cost premium (for example, insecurity), and improve the ease of doing business including streamlining the permitting processes and strengthening contract enforcement.
“Nigeria could further strengthen the resilience of our resources by considering initiatives to decarbonize existing oil and gas operations and continue to encourage investment in lower-carbon energy infrastructure such as gas pipelines as this could reduce the risk of stranded gas resources,” Komolafe said.
The NUPRC Chief Executive Officer said it was expected that gas reserves would be a more resilient energy source under a range of energy transition scenarios.
He said the Natural Gas Flare Commercialisation Programme (NGFCP), National Policy on Decade of Gas, which is hinged on the Natural Gas Expansion Programme (NGEP), Natural Gas Flare Elimination and Monetisation Plan in line with Section 110 of the PIA, 2021, Guideline for Management of Fugitive Methane and Greenhouse Gases Emissions in the Upstream Oil and Gas Operations in Nigeria and the inclusion of Gas Infrastructure Fund in the PIA, were robust regulatory enablers to facilitate these energy resilience approaches that would make “our hydrocarbon projects low carbon emitters and more attractive to investors.”
“We must begin to develop local innovative financing solutions to develop our huge gas resources as the number of international traditional investors have dropped drastically.
“To this end, the Africa Export Import bank (Afrexim) and Africa Petroleum Producers Organisation (APPO) have decided to set up an Africa Energy Bank to provide capital for oil and gas projects in Africa.
“Another critical enabler that can affect the Nigerian workforce during this time of energy transition phase is Just Transition.
“The ‘just transition’ philosophy ensures environmental sustainability as well as decent work, social inclusion, and poverty eradication. Given that Nigeria has a high poverty rate, the importance of just transition principles cannot be overemphasized.
“The Host Communities Development Trust (HCDT) and the Local Content Act have the potential to guarantee longevity of the oil and gas industry during these changing times. To stay competitive and relevant the Nigerian worker will have to upskill in this regard.
“As Nigeria and other African economies look to industrialize to meet the needs of rapidly growing and urbanizing populations, a rise in energy demand could leave many countries facing energy supply challenges.
“Hidden in the challenges that have been highlighted through the course of this address, are significant opportunities. Nigeria has the chance to leverage the energy transition to lead in the creation of renewable-energy businesses that will help to meet the growing energy demand on the continent and create new revenue streams and jobs.
“Fundamentally, it is important to note that within the next few years most IOCs shall divest from onshore oil and gas assets due to poor return on investment as a result of crude oil theft and this may pose threat to job security.
” However, it is expected that indigenous players would leverage on this to recruit experienced professionals who will in turn grow local capacity, in addition indigenous players are urged to take advantage of the predictable licencing rounds as enshrined in the PIA and relevant regulations to form big mega companies that will grow in-Country capacity and also expand outside the shores of Nigeria,” Komolafe added.
He aligned fully with the policy of government which is hinged on ensuring utilisation of huge gas resources as a transition fuel towards cleaner energy sources, adding that “the government must utilise hydrocarbon resource for industrialisation and economic growth.”
Komolafe said the PIA, its corresponding regulations and government policies had the capacity to build a resilient and sustainable oil and gas industry that would latch onto critical socio-economic factors across the world to increase gas production, build a robust gas infrastructure that would entrench Nigeria as a gas hub across Africa and Europe all these would in turn create more jobs and attract investment across the petroleum value chain for the benefit of the Nigerian workforce.
He expressed special gratitude to the organizers of the event, the National Executive of PENGASSAN especially the National President for the special invitation.
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