Gas to Power Status and Outlook

Dr. David Ige

Ag. Managing Director
Gas Aggregation Company Nigeria Limited (GACN)
Table of Contents

Overview of the Nigerian Gas Industry

The Gas Master Plan
Gas Aggregation Company Nigeria Limited
Contact Details
Conclusion

2
The Gas Resource Base

Nigerian Gas Reserves Breakdown

Associated Gas = 97TCF
Non-Associated Gas = 90TCF
Total (P1+P2) = 187TCF

Nigerias gas potential is enormous. Strategy is to leverage this gas resource

significantly for economic growth, with Power Sector being a key part of that
agenda
3
National Aspiration for Gas

Mutually-Reinforcing Cycle of Growth (Gas-Power-Industry-Power-Gas)

The nations gas agenda is robust. It puts gas-to-power at the core, but also envisions
an aggressive gas based industrial growth. This in turn will drive further growth of
power demand.
4
Realizing the Aspiration

FGN has embarked on a major reform of our gas sector to assure delivery of the
aspiration on a sustainable basis .

1. Commenced implementation of the gas master

master--plan strategic framework towards a wholly
competitive, market driven domestic gas sector by 2014

2. Put in place a transitional framework to facilitate gas access in the short to medium term
particularly for the Power sector

3. Redefined the Commercial Framework for domestic gas supply to assure long run
sustainability of supply pricing, contracting, etc.

4. Commenced implementation of a major gas grid infrastructure to enable flexible delivery

of high quality gas to Power and other end users

5
Table of Contents

Overview of the Nigerian Gas Industry

The Gas Master Plan
Gas Aggregation Company Nigeria Limited
Contact Details
Conclusion

6
4 Step Strategic Framework towards Full
Market Status

Framework comprises an orderly transition from an intervention based kick- kick-off to one
of willing buyer willing seller by 2014
2014..

Programme is progressing steadily and on course

Power sector investors can look forward to a fully liquid gas market in Nigeria

7
Roadmap to Free Market

The vision is to attain full market status with willing buyer willing seller by
2014/2015
8
Sources of Gas for Potential Investors

3 sources of gas have been identified for potential investors in the Power sector.

Most dominant source in the short/medium term is the DSO
9
DSO Sources of Gas for Potential Investors
Breakdown of Gas Supply Plan Major New Gas Supply Projects

DSO supply plan comprises existing, many ongoing gas projects and a few major new gas development
projects which are about to take off.

70%
70% of this short/medium term plan is targeted at the Power Sector (about 3bcf/d by 2015
2015))
10
Gas Availability to Power Sector

About 3bcf/d targeted at Power Sector with existing PHCN plants being cardinal base load
consumers of the gas. Additional gas will come from other sources such as Independents
etc.
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Transitional Gas Pricing

To assure sustainability of gas supply, a revised transitional pricing structure

is in place for gas to Power. Aspiration as market develops is willing buyer
willing seller prices.
12
Contractual Arrangements

Considerable effort in developing a bankable template for GSAAs/GTAs

Fairly standardized terms

Enable speedy close-
close-out of negotiations

Will be available on website

Developing a gas transmission Network Code, which will be subscribed

to by all shippers and suppliers of gas

A robust contractual framework for gas supply is also being finalized

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Gas Network Code Study: Network Code
requirements

The major concepts underlying the Code are that:

Gas transportation services should meet market
requirements on a non-
non-discriminatory basis;

System security, reliability and safety should be assured;

Tariffs should reflect the costs of service;

Phased implementation of necessary infrastructure to
support electronic transactions to enhance operations
reliability; and

Rules should be clear, unambiguous and comprehensive

allow free market solutions to develop; and

have mechanisms to handle industry complaints

The Code should evolve in response to market requirements

Effective modification process required

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Gas Infrastructure Programme for Flexible
[5]. QIT-
QIT-Ajaokuta
Ajaokuta--Kano Line
Supply
Over 1000km line to evacuate gas
from Exxon to eastern and
northern power plants

[2]. Ob/Ob Oben Link
Gas can also be fed from the

Pipeline will bridge the East and West. existing Oben
Oben-- Ajaokuta pipeline
Excess gas availability in East. to the North through the Ajaokuta-
Ajaokuta-

Tendering process almost concluded for
Kano Pipeline
pipeline

[3[3]. Link
]. Link to to Eastern
Eastern Network
Network


22projects
projectsincluded
included here
here the
the Northern
Northern
Option
Optionpipe
pipelink
link(NOPL)
(NOPL)andand
the the
Ob/Ob
Ob/Ob

[1] ELPS Expansion to 2bcf/d CPF
CPFtotoNOPL
NOPL
ELPS
ELPS--C capacity is 1000mmcf/d.

Will
Expansion to 2000mmcf/d by 2012
Willenable
enabledrydrygas specification
gas specificationandand
capacity
capacityboost
boost to to
over 300mmcf/d
300300mmcf/d
over mmcf/d to east
to
will enable growth of supply to
Western Power plants east

Ob/Ob

[4] Offshore Oso to QIT link
Enable additional 300mmcf/d from Exxon
by end 2013
ELPS-
ELPS-A loping to 600mmcf/d
600mmcf/d capacity Links Oso to QIT in Akwa Ibom
ongoing and on track for end Q1
Q1 2011
Will enable additional supplies from
Escravos axis
15
Table of Contents

Overview of the Nigerian Gas Industry

The Gas Master Plan
Gas Aggregation Company Nigeria Limited
Contact Details
Conclusion

16
Role of GACN in Domestic Gas Market

Was created to manage Domestic Gas Supply obligations volumes

First point of contact for Gas Buyers to access gas for domestic market use

Primary aim

Coordinate streamlined process for wholesale gas supply from Gas Producers to eligible Gas
Purchasers within Nigeria

Ensuring a balanced growth of all critical sectors of the economy: Power, Gas Based Industries and Local
Distribution Companies

Conduct due diligence assessment on eligible Gas Buyers

Allocate available gas from the DSO to credible buyers successful on assessment

Facilitate the expeditious execution of the GSAA and GTA between the buyer, seller and
transporter respectively

Operational since Jan 2010

Streamlined Process to for Gas Access

A transparent process for gas access , coordinated by the Gas Aggregation Company

Reduced complexity for investors to access gas

Faster time to GSAA closure, enabled by web available template GSPA/GTAs
18
Table of Contents

Overview of the Nigerian Gas Industry

The Gas Master Plan
Gas Aggregation Company Nigeria Limited
Contact Details
Conclusion

19
Contact Details Aggregation Company

Address: 1B, Malcolm Fraser Street, Asokoro District, Abuja, Nigeria

Telephone: +234 (9) 8759045
Email: info@gacn-nigeria.com

Contact Persons:
- Management - Tinuola FESHITAN
email: tinuola.feshitan@gacn-nigeria.com

- Management Tolulope LUKANMBI

email: tolulope.lukanmbi@gacn-nigeria.com

- Management Solomon MAKINDE

email: solomon.makinde@gacn-nigeria.com

20
Table of Contents

Overview of the Nigerian Gas Industry

The Gas Master Plan
Gas Aggregation Company Nigeria Limited
Contact Details
Conclusion

21
Conclusion

Huge gas reserves which are now being deployed in a focused manner to
enable economic growth, which in turn will fuel further growth of the
power sector

A robust programme is ongoing targeted and progressing steadily aimed

at short term availability and long run sustainability

All existing PHCN plants have a comprehensive supply plan for gas
supply and the framework for gas assures long run availability for
subsequent expansions

One-stop shop in the Gas Aggregation Company Nigeria Limited to

facilitate stress free access to gas by prospective power sector investors

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THANK YOU
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