Gas to Power: Generating Power to Meet Nigeria's Domestic Needs

Abstract

About 83% of energy used to generate power in Nigeria is currently derived from gas. This is understandable since the country has huge volumes of gas resources which it intends to take advantage of to grow its economy. Nigeria's gas reserves stands at 199 Tcf as at 01/01/2018 (Department of Petroleum Resources Annual Reserves and Production Report). Gas is the preferred source of energy because of the following; Efficiency in energy generationRelatively low per capita costMeans of eliminating gas flaresIncome generation earner for stakeholderOpportunity for additional job creation Several gas development projects have been embarked upon within the Nigerian Oil and Gas industry to deliver gas to the domestic sector. The Nigerian domestic gas sector is classified into the following three (3) sectors as contained in the Nigerian Gas Master Plan (NGMP); Power – Independent Power Plants (IPPs) e.t.cCommercial – Industries utilizing gas as fuel e.g. Cement PlantsGas Based Industry – Industries utilizing gas as feedstock e.g. Fertilizer Plants Presently, twenty five (25) gas fired plants with a combined installed capacity of about 11,500 MW exist in country. The total gas requirement to run all the plants at full capacity is approximately 3.0Bscfd. Between 2018 and 2037, it is expected that fifty five (55) additional thermal plants will come on stream (Transmission Company of Nigeria Transmission Masterplan). These plants will generate an additional combined power of 19,000 MW and will require gas volumes of approximately 5Bscf/d to generate the power equivalent. As the country's gas reserves are growing, gas production has increased over the years. A current total gas volume of about 8Bscfd is being produced in Nigeria out of which 45% is exported (NLNG), 8.5% is flared, 15% is consumed domestically (Power & Industries) while the balance is either re-injected for pressure maintenance or utilized for operational purposes. The gas to power value chain has been bedeviled by issues which have affected the full generation of power based on installed capacity of existing gas fired power plants. Major among the issues are; Lack of sufficient power transmission capacity from the power generating plantsOff Spec gas volumes supplied to power generating plantsLegacy Debt repayment and payment for gas supplyInadequate gas transportation infrastructureWeak payment structure within the power value chainFunding constraints for development of upstream gas supply sourcesDiffering priorities between upstream gas developersAbsence or ineffective contractual terms between stakeholder parties Steps are being taken to address these issues. Alongside the development of Power Plants, Gas Transportation and Power Transmission Infrastructure are also being developed according to laid down Master Plans. To achieve the ultimate objective of power generation to meet the country's domestic needs, there is a need for alignment on existing master plans within the gas and power sector. This paper attempts to evaluate the Country's gas development plans, the Nigerian Gas Master Plan and the Transmission Master Plan in relation to each other. Gaps (if any) will be identified and solutions proffered to ensure that the Federal Government's objectives are realized.