The sprawling industrial hubs in key cities and communities of the South-West are now anticipating achieving capacity production with assurances of steady and clean energy supply.
The Manufacturers Association of Nigeria (MAN), has consistently lamented effect of Nigeria’s energy crises on its activities, as it disclosed spending N76.7 billion in half year 2022, to source alternative power.
The sector was negatively affected while the electricity industry wobble following inability of Electricity Distribution Companies (DisCos) to sustain steady supply.
The MAN, in its latest report obtained by NATIONAL ECONOMY, indicated that electricity supply to the industries from the national grid during the second half of year 2022 declined marginally to 11 hours per day from 12 hours recorded in the preceding half.
However, average number of outages per day stabilised at 4 times in the second half of 2022 as it was recorded for the first half of the year.
Irrefutably, the trends shows that power supply to the industry is still a huge challenge which accounts for huge investment of manufacturers in self-energy generation.
Consequently, expenditure of alternative energy source increased to N76.7 billion in the second half of 2022 from N45.04 billion recorded in the corresponding half of 2021; thus, indicating N31.66 billion or 70 per cent increase over the period, the director –general (DG), of MAN, Mr Segun Ajayi-Kadir, disclosed.
It also increased by N8.9 billion or 13 per cent when compared with N67.8 billion recorded in the preceding half. The expenditure was incurred on procurement of diesel, gas, generators and spare parts, inverters and UPS, etc.
However, the energy crises is anticipated to lower as the Nigerian National Petroleum Company Limited, NNPC Gas Marketing Limited (NGML), entered into partnership with Transit Gas Nigeria Limited (TGNL), to connect the south west industrial hubs to alternative clean electricity supply.
The federal government in support of creating enabling environment that will lead to gas utilisation endorsed the Petroleum Industry Act (PIA), which has laid a new foundation for investment in oil and gas projects.
The government has also rolled out ambitious plans for transforming the country into one of the world’s leading producers of gas – and also into a major consumer of gas. Another ambitious initiative of the government is the commitment to making the 2021-2030 period: “The Decade of Gas.”
Experts have maintained that Nigeria will only achieve industrialisation if it develops its natural gas resources further and build the infrastructure to convert this into electricity to power businesses and homes.
This is the position of managing director of Shell Nigeria Gas Limited (SNG) and president of the Nigeria Gas Association, Ed Ubong.
It is therefore anticipated that the NGML and TGNL partnership will bring the anticipated result.
Nigeria has around 200 trillion cubic feet of proven gas reserves and about 600 trillion cubic feet of unproven reserves, but a lack of adequate power grid infrastructure results in unreliable power supply from the electricity grid and power shortages in urban and rural areas.
Declaring 2021-2030 the “Decade of Gas Development for Nigeria,” the government is determined to develop the gas sector. Gas has enormous potential to diversify and lift the Nigerian economy.
“It’s no secret: Nigeria has a lot of gas. It needs to be brought to the surface. It needs to be monetised and it needs to be consumed,” said Ubong.
The successful development of these resources and the construction of much-needed infrastructure hinge on an investor-friendly business environment.
“Simply put, Nigeria needs more gas for power and electricity generation. Nigeria needs more gas for homes. Nigeria needs more gas for industry. We need to have big industries; industries that can employ hundreds of thousands of people and produce goods for domestic use and export,” said Ubong.
“But to be able to deliver that, Nigeria needs a business climate that is investor-friendly and a business climate that honours contracts. The country also needs a pricing and regulatory framework that is friendly for businesses to operate and allows businesses to plan.”
Nigeria needs to develop vast regional gas infrastructure – the facilities and pipelines – that will carry the gas across the country to where it is needed and into neighbouring countries. Infrastructure is also needed to take the gas from the main pipelines into the industrial and commercial clusters where customers can be connected. In addition to this, Nigeria needs to support smaller facilities by developing the capacity to transport Liquefied Natural Gas (LNG) to end-users using trucks.
None of the above can be achieved without training people to help deliver on these ambitions. “Nigeria needs to invest in training people or retraining professionals who have spent decades working in an oil-based economy to function effectively in a gas-based economy,” said Ubong.
This is however becoming a reality after the NNPC Gas Marketing Limited (NGML) has partnered with Transit Gas Nigeria Limited (TGNL) commissioned a 150 million standard cubic feet per day (mmscfd) natural gas city gate to deepen access to cost-effective energy for industries in the Southwest region.
The project commissioned on May 9, at Old Lagos-Ijebu Ode Road, Ibefun, Ogun State will ensure the safe delivery of gas to various industrial and commercial uses within the Sagamu gas distribution zone.
A natural gas city gate serves as a connection point between the high-pressure interstate natural gas transmission system and the lower-pressure local distribution system that delivers natural gas to homes, businesses, and other end-users in a specific area or region.
Before he cut the tape to commission the project, Dapo Abiodun, governor of Ogun State said the conclusion of the facility marks another milestone in the history of gas penetration and inclusion in Nigeria and Ogun State.
“Today’s commissioning of Ibefun natural gas city gate will support, drive and complement the administration’s gas mobility projects,” he said.
“This will be through the introduction of gas-powered mass transit vehicles, and the development of electric motorcycles, all to reduce carbon emissions and add carbon credits as we join other advanced countries in going green.”
According to the governor, this investment will further support the industrial revolution of Ogun State.
“The crucial role gas will play in driving industrial growth in the future becomes particularly appealing, not just for providing energy security needed for continuous production but also reducing energy cost for manufacturers, so they can be more competitive with low carbon emissions,” Abiodun said.
“This great project will reinforce our commitment to deliver innovative solutions that create sustainability efficient energy utilisation for the benefit of the people of Ogun State.”
Nigeria has the largest gas reserve in Africa and the 9th largest globally. The country currently produces 8.5 million billion cubic feet per day with a $50 billion investment opportunity.
Abdulkabir Ahmed, group executive director, of gas and power, Nigerian National Petroleum Company Limited (NNPCL) representing Mele Kyari, GCEO, NNPCL said that in spite of Nigeria’s huge natural gas, they are challenges in utilising it domestically.
“In this regard, it has become imperative for players in the industry to tighten up their belt and ensure that this abandoned resource is put to use domestically,” he said.
“TGNL, a part of Axxela and NGML has partnered to ensure they deepen the usage of domestic gas in Nigeria.”
According to Ahmed, this will promote and integrate the use of gas domestically and generate power for industries which will eventually lead to economic growth and prosperity for the people, not only in Ogun State but also in Nigeria generally.
The executive director added that the natural gas facility will be an additional achievement to the “Decade of Gas” that was launched by President Muhammadu Buhari to ensure the prosperity of Nigeria.
“NGML and Axxela natural gas distribution relationship stand for 20 years. Today, the partnership has connected over 200 industries to natural gas,” Ahmed said.
“This 150 million scfd capacity will create jobs and enhance the current development and propel industrial growth.”
For Bolaji Osunsanya, managing director, of TGNL, the development of the Sagamu gas distribution zone is born out of the need to deliver on a medium to long-term expansion strategy.
“It will broaden our outlet portfolio and strengthen our market base in the energy sector. Our partnership with NGML has continued to create opportunities for both parties to leverage our expertise and resources to develop more infrastructure projects to drive economic growth in Nigeria,” he said.
“This project commissioned today will help deepen natural gas utilitisation in Ogun State and its environs.”
According to the managing director, the gas facility will further spur Ogun State for economic growth by enabling industrialisation within the State, promoting investment and supporting the manufacturing sector.
“It is expected to contribute to job creation and growth for medium size enterprises. Our commitment to safety and environmental sustainability is reflected in every aspect of this facility, just to ensure we follow the best global standards,” he said.
