May 19, 2021

NNPC And Its Constant Gas Supply For Domestic And Export Markets

4 min read

By Adewole Kehinde

I took my time to read through the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR), released on Tuesday and the Gas production and consumption caught my attention.

It is no longer news that Nigeria as the sixth largest gas country and ninth in gas export, consumes very little of the resources.

Gas has the potential to diversify and uplift Nigeria’s economy, given the country’s potential of about 600trillion cubic feet of gas and the rising global demand for cleaner energy sources.

This has offered Nigeria an opportunity to exploit its gas resources for the good of the country.

I know that NNPC’s major objective for the gas sector is to transform Nigeria into an industrialized nation with gas playing a major role and this have been demonstrated through enhanced accelerated gas revolution.

Despite the lack of focus on gas development in the past, Nigeria has benefited immensely from the resource.

The Nigeria Liquefied Natural Gas which contributes about one percent to GDP, has generated $114 billion in revenues over the years, $9 billion in taxes, $18 billion in dividends to the Federal Government and $15 billion in feed gas purchase.

The Buhari’s administration had declared Year 2020 as “The Year of Gas. Before then, the Administration had shown commitment to the development of Nigeria’s vast gas resources and strengthening of the gas value chain by reviewing and Gazetting policies and regulations to enhance operations in the sector as encapsulated in the National Gas Policy of 2017.

I know very well that Nigeria’s enormous gas resource would enable it tackle the energy poverty in the country and generate electricity and power its industries. The latest NNPC Monthly report said that the daily average natural gas supply to gas power plants increased by 2.38% to 836mmscfd, equivalent to power generation of 3,415MW.

“The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari recently pointed out that even though Nigeria was belatedly shifting its focus on gas, a lot could still be done.

He observed that oil majors have not in the past treated the domestic market as a business, which led to under supplying of the product to domestic users. He said a lot has been done to boost the development of the resource in the past few years.

NNPC’s recent report also shows that a total of 223.55Billion Cubic Feet (BCF) of Natural Gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020. 

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97% and 14.83% respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

This translates to a total supply of 1,428.65mmscfd of gas to the domestic market and 3,385.57mmscfd to the export market in the month under review.

This indicates that 67.15% of the daily gas output was commercialized while the balance of 32.85% was re-injected, used as upstream fuel, or flared.

Gas flare rate was 7.73% for the month under review (i.e. 554.01mmscfd) compared with average gas flare rate of 7.19% (i.e. 539.69mmscfd) for the period of January 2020 to January 2021.

It is high time Nigeria leverage on the huge gas reserves to become not just a major exporter but to become a major gas consuming nation.

It is at this juncture that I must praise President Buhari for his commitment of huge resources to ensure that domestic gas infrastructure reach every corner of our country, to deepen Natural gas utilization, spur investment in power and gas-based industries, grow the economy and generate employment for millions of our young people.

I also commend the GMD of the NNPC and its entire Management for the 66th edition of the NNPC MFOR which highlighted NNPC’s activities for the period of January 2020 to January 2021.

It is published in line with the Corporation’s commitment to the tenets of Transparency, Accountability and Performance Excellence (TAPE).

There is no doubt that the Corporation has sustained effective communication with its stakeholders through the publication of the report on its website, independent online news platforms and national dailies.

Adewole Kehinde is the publisher of Swift Reporters and Public Affairs Analyst. He can be reached via 08166240846, 08123608662

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