Nigeria is working on a path energy transition even though the pace is slow.
But as an industry player, the government is focused on ensuring that the overall national energy security of the country is administered in a manner that optimises her position within the complex global energy dynamics.
The country is however guided by the compelling cases of available, affordable and sustainable energy in the drive for overall energy transition.
At the Oil Trading and Logistics Africa, 2023 summit, stakeholders learnt how government is ensuring that this transition aligns with emerging market realities, global geo-politics, technological advancements, and sustainability requirements.
Chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA) Farouk Ahmed, at the summit with Theme: “Energy, Synergy and New Beginnings.” presented what seemed like a tripod approach as a path being pursued by government to achieve that objective.
A critical pillar for pursuing a structured energy transition in Nigeria as seen in his presentation is the adoption of gas as a transition fuel and the emplacement of strategic gas development frameworks through the Decade of Gas Program (DOGP). The DOGP has been designed to ensure the accelerated growth of gas processing, storage, transportation, retail, and utilisation in Nigeria within the decade.
The programme has optimal industry inclusiveness and is making steady progress in the implementation of all its strategic objectives, initiatives and projects.
He said that while harnessing the country’s rich gas resource base of over 208 trillion cubic feet, TCF, as being coordinated by the DOGP, gas derivatives are expected to provide cleaner and cheaper alternatives to other white products.
Still on the gas as the lead to the transition journey, the full deregulation of the sector has further enhanced Nigeria’s capacity to adopt Compressed Natural Gas, CNG as a more sustainable and affordable alternative automotive fuel.
This is further motivated by President Bola Ahmed Tinubu’s recent unveiling of the Presidential initiative on CNG (PiCNG), with the focus of providing immediate and long-lasting infrastructure for modern mass transit systems.
The PiCNG has already commenced work and is adequately supported with all necessary tools including required funding to meet its aspirations.
Also, one of the most pressing concerns of the moment is the reduction of harmful emissions from petroleum production and utilisation.
Farouk, is convinced that for the industry to remain viable, there is the need to deploy measures that would protect the environment and promote sustainability of which can be achieved through the reduction of emission of carbon, sulfur, and BTEX compounds (benzene, toluene, ethylbenzene, and xylene) amongst others.
For carbon, the net-zero target determines strategies, while for sulfur and others, the Nigerian Industrial Standards (NIS) and the ECOWAS Clean-Fuels roadmap is largely guiding the country’s actions.
The NMDPRA is working with all stakeholders especially its licensees and the Standards Organization of Nigeria, SON, in revising the NIS provisions for Premium Motor Spirit, PMS also called petrol and Automotive Gas Oil(AGO), to comply with global and regional expectations.
With ongoing collaboration there is a projected gradual enhancements of local products quality from the current requirements to Afri-6 specifications, within a framework that is carefully managed through our extensive collaborations.
Additionally, achieving net-zero target for carbon requires gross carbon emission to equal gross carbon sinking.
However, Farouk, revealed that existing and emerging Carbon Capture Storage and Utilisation (CCSU) technologies may not effectively provide the petroleum industry with sufficient means of achieving this netzero target, hence the introduction of the biofuels industry into the energy mix as a viable mechanism for carbon sinkage.
At the moment, the agency is working with industry experts and studying other economies that have adopted biofuels and also developing required guidelines to enable the practical adoption of E10 / D20, and eventually higher ratio ethanol and biodiesel into our PMS and AGO blends.
In addition to the carbon credit of these blends, other significant advantages of adopting E10 and D20 include reduction in cost of litre, enhancement in octane rating and major growth in national agriculture business with attendant job creation.
In doing all of these the country remains conscious of the potential conflict between the bio-fuel industry and National food security.
These two competing demands are clearly balanced in the National Energy Policy as approved by the Federal Executive Council (FEC) in 2017 and the National Biofuels Policy gazette in 2007, which will guide the smooth introduction of biofuels into our energy mix.
The other major concern with biofuels is the readiness of our infrastructure with relation to the corrosive and hygroscopic nature of the biofuels. This and other key intricacies will be thoroughly addressed by the robust engagements with stakeholders and guidelines that will be rolled out before their introduction into the fuel mix.
Interestingly too, one of the agency’s main focus has been to enable the growth of the Industry, in line with the provision of the Petroleum Industry Act, PIA which has resulted in the issuance of relevant licences for the establishment and operationalisation of midstream and downstream, facilities.
Significantly, the 650,000 bpd Dangote refinery complex has been pre-commissioned and issued Licence to Introduce Hydrocarbon, while a combined capacity 29,500 bpd modular refineries are operating & supplying various petroleum products in the Country.
In addition, existing refineries operated by the Nigerian National Petroleum Company Limited, NNPCL, with combined capacity of 445,000 bpd are currently being rehabilitated and it is hoped that at the end Nigeria will achieve a net export position of products in the near term when the planned and rehabilitated refineries become operational.
Meanwhile, in order to ensure adequate supply of products through importation, for guaranteed energy security, the Authority has developed and released set of guidelines that are transparent with fully automated application platform that guarantees efficient processing and issuance of licences and permits.
The Authority is also taking proactive measures to build and promote sustainability in the industry.
To this end, it has introduced NMDPRA Industry Sustainability Initiative (NISI), that will steer policy initiatives to address the institutional framework needed for the sustainable development of the midstream and downstream petroleum industry.
This initiative aligns Nigeria’s commitment to achieving net-zero carbon emissions (carbon neutrality) by 2060, and improvement of the sustainability credentials of Nigeria’s Midstream and Downstream sector with the Sustainability Development Goals while taking into cognisance Nigeria’s economic development peculiarity, without compromising compliance with international best practices in our corporate governance culture.
The Authority intends to engage more with stakeholders in a collective effort to move the midstream and downstream sector into a clean-fuel network that enables decarbonisation across the value chain while meeting the critical energy needs of affordability, safety and reliability.
Success in reducing emissions will depend on the efficacy of a policy environment that uses market forces to enable low Green House Gases (GHG) innovation and deployment with accurate and costeffective emissions measurement, verification, and reporting.
On the crucial topic to compliance to Health, Safety, Environment, and Community (HSEC) in its operations, the expectations are not merely regulatory but also moral and ethical imperatives that shape our responsibility to society, employees, families, and our planet.
According to him, “Our operations hold significant potential for environmental impact, and the safety of employees and the public is paramount to the government.
In 2022, the industry subsector recorded 33 incidents leading to 32 fatalities and 49 injuries, whilst in 2023, regrettably 30 incidents have been recorded resulting in 28 fatalities and 17 injuries. Our primary obligation must be to attain an incident free operation by ensuring that the health and safety of our workplace is prioritised. This means providing a safe working environment, proper training, and the necessary protective measures to prevent accidents and injuries. “
He disclosed that downstream operations have had substantial environmental consequences, from emissions to waste disposal, and it is the Authority’s responsibility to minimise these impacts through rigorous compliance with environmental regulations.
To ameliorate this the Authority has developed and published the three regulations on environment, safety and environmental remediation fund.
However, compliance is not static, said Farouk, and as Regulations evolve, technology advances, and best practices change.
He therefore called on industry stakeholders to commit to continuous improvement, staying current with industry standards and adopting the latest technologies and practices towards a sustainable midstream and downstream sector.
