You are on page 1of 20

Achievement of the Gas Master Plan:

Strategies for a Workable Roadmap

Dr. David Ige


Group Executive Director, Gas & Power NNPC

May 2014
National Gas Summit, Calabar
Unprecedented Growth Requirement in Gas Sector

868,000BOE

926,000BOE

Nigerias gas sector growth projection means it could rank as high as number 5 in Africa in terms
of BOE. In reality, a brand new industry is being created from scratch.
2
The Nigerian Gas Master-
Master-plan
- Strategic Aspiration for Natural Gas

STRATEGIC THEMES OF GAS


MASTER PLAN

GAS TO POWER GAS BASED INDUSTRIALISATION HIGH VALUE EXPORT


By 2014, we would have
positioned Nigeria firmly as
the undisputed regional hub
for gas-
gas-based industries such Regional
as fertilizer, petrochemicals
and methanol.
LNG Pipelines

Deliver Gas for at least threefold Deliver on Presidents Gas Consolidate Nigerias position and
increase in generation capacity by Revolution Agenda to: market share in high value export
2015 Create regional hub for gas-
gas-based markets
industries fertilizer, petrochemical and Regional gas pipelines consolidate
methanol national footprint and influence
Transform gas sector to value adding
sector

It was essential to ensure that growth translated positively to broad economic impact. Hence, our
national strategic aspiration was anchored on 3 legs
3
The Nigerian Gas Master-
Master-Plan
- 4 Step Plan to Full Market Driven Domestic Gas Sector

Willing
Buyer
Willing
Seller!!

4
The Nigerian Gas Master-
Master-plan
- 4 Step Roadmap to Full Market Driven Domestic Gas Sector

The vision is to attain full market status with willing buyer willing seller
5
Domestic Supply Obligation

The gas supply to underpin agenda is from the Domestic Gas supply Obligation (DSO)

6
Gas Supply Growth
- Sector Performance Overview

Gas Supply Growth and Forecast


Gas supply has grown to about 1500mmcfd by end Q2 2013; additional
500mmcfd available but stranded in the East
Supply to Power has grown from 620mmcfd in 2011 to 980mmcfd
Non-Power supply, in the same period, almost doubled from 185 to 350mmcfd
Over 350km of gas pipelines have been completed and commissioned and all
power plants now connected to permanent gas supply infrastructure

Domestic gas supply is growing steadily, unfortunately, recurrent pipeline attacks continue to
diminish the impact of the growth, particularly on power availability 7
Meeting The Power Sector Demand
- Planned Gas Supply and Infrastructure Projects
There are various projects ongoing and at varying level of maturation which on completion will
deliver gas in 3 planned waves

8
ELPS 2 Pipeline Project
- Prioritized PS4/5 segment to boost Olorunshogo Pressure
Placement of pipeline on roller for HDD Pull Back Tie-in Welding Installation of Concrete Saddle on lowered pipe string

Sand blasting of welded field joint Installation of Line Brake Valve Hot tapping operation for interconnection

This project is due for completion in April 2014 9


OB3 Pipeline Project
- Line Pipes arrived and enroute site

10
Aggregate Domestic Gas Price

2.50
Export Parity

2.00

1.50
Gas Price ($/mcf)

1.00

0.50

0.00
2009 2010 2011 2012 2013 2014 2015

Year
11
Sustainable Commercial Framework
- Status Update on 4 Focus Areas
Bankable contractual framework for gas supply and appropriate revenue securitization
for gas purchased. This has been reasonably successful

1 2 3 4
Realistic and Enforceable World Bank Partial
Gas Pricing / Bankable Strategic Aggregator &
Domestic Supply Obligations Risk Guarantee (PRG)
Agreements (GSA/GTA) Transitional Arrangements
(DSO) Agreements

 A domestic supply  New and more  Gas Aggregation  World Bank revenue
obligation framework sustainable domestic Company of Nigeria securitization scheme in
now in place
gas pricing to Power established to manage place to mitigate risk of
 Suppliers now and other sectors now DSO and price payment failures for gas
developing supply in place aggregation supplied
plans to meet
obligation  Bankable Gas Sales &
Purchase Agreement /
Gas Transmission
Agreement now in place

 Developed the first ever


Nigerian Gas Network
Code to govern pipeline
utilization etc.

12
Power Sector Gas Supply Vs. Demand

NB: This excludes captive power solutions for industrial parks and major industrial projects such as Ogidigben
Ogidigben,, Eleme Fertilizer and Dangote
Fertilizer plants all of which will be supplied gas to power 13
Proposed Ogidigben Gas Revolution Industrial Park
Model of Africas Largest Gas City
The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again.

14
We have completed key pre-construction data
gathering on site
Fugro activities in
Ogidigben Study
Reports Available
Shortly
Conducted the
following surveys /
investigations at site
Soil Investigation
The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again. The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again.
Hydrology Study
Hydrogeology Study
Sand Search
Bathymetry Survey
Environmental Impact
Assessment EIA
(Onshore & Offshore)

Investors can access at no cost, significant technical data in respect of the site in order to fast track
technical evaluation and design of their projects
15
Julius Berger has commenced early works on site for
Phase 1..
The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again.

16
Ogidigben Gas Based Industrial Park
- Job Creation

 H1 2014 Site works (Site clearing,


sand filling, logistic base, access
road, Helipad, event site preparation,
catering, logistics etc.)
 H2 2014 Expanded site works,
construction of camp site, Jetty,
water treatment plant, etc.)
 2015 Development of Ogidigben
base infrastructure, construction of
Nagarjuna fertilizer plant, dredging of
Escravos River and construction of
breakwater
 2016 Construction of CPF, IPP,
Port, Nagarjuna fertilizer plant and
Urban development)
 2017 Construction of Xenel
Petrochemical Plant

17
Challenges

1. Increasing vulnerability to criminal attack on pipelines

2. Project delivery issues


Approval delays
Contractor performance issues
Community challenges mostly on pipeline routes

3. Upstream JV funding shortfall

4. Fiscal framework

5. Lukewarm IOC attitude towards domestic gas supply oil and


exports ranked higher in priority

18
Vandalized Points along the ELPS (West Area)

Blasted point KP 4.30 Blasted point KP 33.30 Blasted point at KP 38+800 bubbling
coordinates: E 0311607, N 0176004 coordinates: : E 0343320, N 0172828 actively during integrity checks.
The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again.

Blasted point KP 5.00 Blasted point KP 33.35 Blasted point KP 37


coordinates: E 0312535, N 0175778 coordinates: E 0343350, N 0172828 E 0346376, N 0172940
The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again.
THANK YOU

20

You might also like