There are indications that renewable energy and energy storage may likely put to risk the efforts by the government to harness its 203.16 trillion cubic feet (TCF) gas reserves to spur economic activities and boost revenue.
A report by Wood Mackenzie showed that over three quarters, or 77 per cent of the new liquefied natural gas (LNG) supply may be at risk.
It further said that Nigeria’s further expansion of LNG infrastructure, especially the Train 7 of the Nigerian LNG Limited, may not record a boost.
Nigeria’s total gas reserves stands at 203.16 trillion cubic feet (TCF), representing a marginal increase of 1.16tcf or 0.57 per cent from the 202tcf recorded in 2019.
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Minister of state for Petroleum Resources, Timipre Sylva, had said that the LNG aggressive idea is to unlock revenue and economic potential of gas even as the government declared 2020 the Year of Gas.
The Nigerian National Petroleum Corporation (NNPC) and the Nigeria LNG Limited (NLNG) similarly signed a pact for the engineering, procurement and construction (EPC) contracts for the LNG train seven, triggering the effective commencement of the detailed design and construction phase of the multi-billion dollar project.
On completion, the project is expected to raise the plant’s current six-train capacity by 35 per cent, from the extant 22 million tonnes per annum (MTPA) to 30 MTPA.
Wood Mackenzie said that gas demand would come under pressure from breakthrough investment in renewables, energy storage in the power sector, efficiency improvement and adoption of new technologies in non-power sectors.
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The world energy research and rating agency stated that green hydrogen would become a game-changer in the long-term as it would emerge as a key competitor to gas consumption in the next two decades while achieving a 10% share in the total primary energy demand by 2050.
Incidentally, in Nigeria, where gas-fired power plants are key electricity sources, industry players, as well as consumers, are already looking towards renewable solutions. Again, most distribution companies as well as NNPC have signed contracts for renewable energy projects.
The United Nations Environment Programme (UNEP) had said global investment in new renewable energy capacity hit $2.6 trillion by the end of 2019 to close out a record-breaking decade in renewable energy investment.
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Wood Mackenzie Principal Analyst, Kateryna Filippenko noted that weaker global gas demand creates space for limited new developments, stressing that the development signaled a significant challenge for companies considering final investment decision (FID) on new projects.
Chibisi Ohakah, Abuja
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