NNPC Gas & Power – Unlocking Nigeria’s Gas Potential
The Nigerian National Petroleum Corporation (NNPC) is made up of various autonomous business units, including Gas & Power, Petrochemicals, Finance, Corporate Services, and Refineries. We learn how Nigeria is developing fast to make the most of the energy transition revolution.
The Gas & Power unit in particular manages gas sales, all relevant infrastructure development, and also manages the power and LNG businesses. This includes oversight of the company that manages NNPC’s critical pipeline infrastructure.
“We have a Nigerian gas marketing company mandated to market the gas to the users,” says Engineer Yusuf Usman, Chief Operations Officer of NNPC Gas & Power. “We also have the Gas & Power Investment Company, structured to invest in power businesses and gas industries such as fertiliser, ammonia, methanol and more.”
NNPC Gas & Power also invests in local natural gas. The company has one running plant, Nigerian LNG Ltd, as well as three other LNG plants on the drawing board.
“We need a robust infrastructure that will move 4.5 TC in the domestic market across the country, so we’re being aggressive in our infrastructure development,” Usman tells us.
“We’re also mandated to generate additional new power, 5000mw into the national grid, while sustaining the operations of the Nigerian LNG plant and expanding its export footprint.”
NNPC Gas & Power’s expansion plan, the Nigeria LNG Train 7 project (Train 7), is going smoothly and is expected to boost Nigeria’s LNG output by close to a third.
The project is seen as a strategic imperative for Nigeria’s long-term economic stability.
“We fully implemented the ETC last month,” Usman points out. “In a nutshell, our objective in gas and power is that by the time we actualise this plan we will be in a position to have a robust direct market. Our goal is to reach a liberalised market where we’ll have established trading hubs, prices will be announced and in the next three years we’ll have established a route to market.”
At the same time, NNPC Gas & Power is embarking on original pipelines. The first of these is the West African pipeline, taking gas from Nigeria to the Republic of Benin and Ghana.
“We’re looking at expanding that, and also building a pipeline to Morocco through 15 African countries, bring electricity and development to locations across Africa,” Usman explains.
Financing New Infrastructure
Of course, any project with this level of vision is going to face challenges, in terms of sourcing suppliers, contractors, and finance.
“We’re embarking on aggressive infrastructural development. We have had to restructure, in the form of a Public-Private Enterprise, partnering with private companies. The structure in finance and deals has been a little challenging to complete.
A typical example is the largest most aggressive pipeline has 10% equity,” Usman says.
“Finance and funding are a major challenge that we have in view of accelerating the infrastructure to the domestic market.”
With a project like this, things will not always progress predictably, and when there are many subcontractors on board any delay can result in a domino chain effect.
“Sometimes we have delays in projects and try to promote local content. Managing that delicate balance is another challenge we have but we’re mitigating it,” Usman says. “We have an opportunity, we have demand, and I believe we’ll overcome our challenges and deliver the projects on time.”
The success of these projects is not just important in and of themselves, they are also part of a wider effort to industrialise Nigeria, supported by the government itself.
“Last month the President said that 2021 marks the beginning of the Decade of Gas, so we will see it used a lot as a transition fuel and with that kind of support from the government we’re moving in the right direction,” Usman says proudly.
As well as looking to gas as an energy source, NNPC Gas & Power also wants to promote it as a potential alternative fuel.
“At the moment we don’t have gas being used to drive our vehicles, so the fuel price is increasing and we need to offer alternatives to consumers,” Usman tells us. “We have an aggressive plan to promote the use of gas for automotive vehicles.”
This is alongside move to put an end to flaring and reduce NNPC’s carbon footprint.
“We have decarbonisation programs within the company to reduce our footprint,” Usman says. “At the moment for most of our operations we do not even know our footprint level, so we’re establishing what that is and then we’re working to reduce that. For instance, we do not know how much carbon flaring is producing. Once we know that then by next year, we will reduce it by our set targets. We are looking at every aspect of our business to set targets and make plans to reduce our footprint and set us on our global excellence path.”
More Than the Sum of Its Parts
Each of these individual developments and projects comes together to create a bold new vision for Nigeria and the whole of LNG within it. As Usman tells us, Nigeria is well placed to make the most of the energy transition revolution.
“I see NNPPC Gas and Power is going to take the lead. Most oil companies, globally, are transitioning in the kind of energy we use,” Usman observes. “In the next ten or twenty years in Nigeria, we’re going to be more focused on gas. The country has more gas than oil. All the gas we have, we have found while looking for oil. According to the US Department of Energy, we can find over 600 TC of gas.”
Usman argues that it is essential to take advantage of these resources.
“If we don’t provide public policies and structure to make use of these resources as quickly as possible, we’ll be leaving these resources in the land,” Usman argues. “We’re in such a beautiful location, but Africa is energy deficient. What that means is we have an opportunity because while other places are saturated Africa can focus on tapping new resources. I see us moving to support the energy transition for businesses. Gas should be a resource that could replace all the petroleum in the country.”