……….Also Examines Challenges Facing Gas Project Financing
The weekly power discourse organized by The Electricity Hub in Abuja held on Wednesday themed on assessing the approaches and complexities towards financing gas projects and the role of gas in Nigeria’s energy access.
Discussants include Frank Edozie, component lead (power) UKNIAF, Oga Adejo-Ogiri, executive secretary, Association of Local Distributors of Gas, Chijioke Ozoho, manager (commercial) Gas Aggregation Company of Nigeria and Chineye Nwosu, business development manager, Axxela.
The world is currently seeing an increase in gas demand. Growing energy demands following the resumption of economic activities following the Covid-19 Pandemic and the increasingly colder winters have led to a rise in energy demand across Europe and Asia.
This need to increase global gas capacity changes the role gas plays in the energy landscape. For instance, the EU plans to increase funding for gas projects in Europe by labelling gas as a “green” energy source. While this move might be the first step in acknowledging the importance of gas to the global energy supply, it remains to be seen if this move would affect funding for foreign gas projects.
The panel was in agreement that gas indeed has a strategic role in global energy access, especially in growing economies, including Nigeria where about 46% of the population lack access to electricity. This is in spite of the fact that Nigeria ranks among countries with huge gas reserves.
Given the new restrictions to funding foreign new gas projects, developing countries are challenged with very little time to explore gas to meet their energy needs and gradually reduce their dependence on fossil fuels.
Oga Adejo-Ogiri noted that fossil fuel projects would harm developing nations. Due to the affordability of gas, several economies have made gas a fuel of choice to drive economic development.
While developed countries have long-used gas to power their economies, developing countries are just approaching the phase. Hence defunding gas projects would mean they lose access to the funding required to scale-up gas facilities to power their economies.
It will lead to reliance on other dirty fossil fuel sources (coal and oil) to meet energy demands, thereby increasing carbon emissions in these regions.
In his own submissions, Frank Edozie stated that many gas basins are yet to be explored in Nigeria, especially in the inland basins (Anambra Basin, Benue Trough, Gongola Basin and Benin Basin) that can supply adequate electricity in the region.
“Rather than defunding gas projects, financing should go into discovering and exploring these reserves. If any defunding is required, it should be focused on oil projects,” he said.
In his own presentations, Chijioke Uzoho who is the manager (commercial) Gas Aggregation Company of Nigeria, stressed the need for Nigeria to commercialize its gas operations. “The window to commercialize gas is fast closing, and it has a strategic role to play in closing Nigeria’s energy access gaps,” he said.
They all also agreed that while gas has significance to energy transition, developing countries need it to enable them to achieve their energy access goals.
By Chibisi Ohakah, Abuja
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