Gas Infrastructure and

Supply

Dr. David Ige

Group Executive Director, Gas &
Power
Nigerian National Petroleum
Corporation
January 20, 2012

Gas Strategy and Anchor Sectors

STRATEGIC
FRAMEWORK FOR
NIGERIAN GAS
GAS TO POWER

Significantly increase
gas supply to the
Power Sector
Focused delivery plan
to support existing and
ongoing power plants
by PHCN and NIPP
Deliver Gas for at least
12GW by 2015

GAS BASED INDUSTRIALISATION HIGH VALUE EXPORT

By 2014, we would
have positioned
Nigeria firmly as the
undisputed regional
hub for gas-based
industries such as
fertilizer,
petrochemicals and
onmethanol.
Presidents

Deliver
Gas Revolution Agenda
to:

Position Nigeria as the

regional hub for gas-based
industries such as fertilizer,
petrochemical and
methanol
Transform gas sector to
value adding sector

LNG

Regiona
l
Pipeline
s

Consolidate Nigerias
position and market
share in high value
export markets

Targeted LNG export

opportunities
Regional gas pipelines that
help consolidate nations
footprint and influence

Gas Consumption and Demand

Forecast
Based on the forecast growth in domestic gas demand, we foresee
opportunities in transmission and marketing
Nigerias Historical and Projected Gas Demand
4,500
4,000
3,500
3,000
2,500

mmscf

2,000
1,500
1,000
500
0

Year
Power

LDC

GBI

WAGP
3

Gas Availability
- Sources of Gas in Domestic Market

3 Sources of Gas in
Nigeria

FGN Mandated
Domestic Supply
Obligations (DSO)
Most significant short/medium term
planned source of gas
Allocation of available gas from
DSO sources managed by GACN

Direct Bilateral
Arrangement
between Suppliers
and Buyers

Unutilized Gas Flares

Gas from suppliers over and above their

Small flared gas for which no plan exists

respective DSO
Managed bilaterally on a willing buyer,

to utilize but 3rd party players may

propose utilization plans

willing seller basis i.e. negotiated terms

Limited volume in the short term,
particularly from IOCs.

Domestic Supply Obligation Western

Area Supply Projects

4
3
2
1

Dry Gas

Existing Wet

Ongoing Projects -

FID Acceleration - Wet5 Gas from5

Domestic Supply Obligation

Eastern Area Supply Projects

Analysis of Stranded Gas in the East

A significant amount of gas is stranded currently in the East mainly
due to infrastructure and the delays in NIPP power plants

Map showing critical Infrastructures

Kaduna

Abuja

Geregu

Olorunshogo

Omotosho
Ihovbor

Oben

Egbin

Koko Port

Sapele

Ob/Ob

Afam
Delta IV

Escravos
Utorogu

Calabar

Bonny LNG

Western Network Pipeline System

Olorunshogo Permanent Line
24permanent line to Olorunshogo.
Recent contract approval by Mr. P and
contractor being mobilized. Due Apr
2012
Will address pressure problem at
Olorunsogo

Looping ELPS C
Doubling capacity to 2bcf/d from
Warri to lagos
Due August 2012
Pipes expected in October

ELPS A
Escravos to Warri expansion
from 300mmcf/d to 600mmcf/d
Will allow immediate addition
of 80mmcf/d from Escravos
Due end 2011
9

Aja
ok
ut
a
Ka
no
(A
KK
)

Jebba

Geregu
NIPP
Ajaokuta

Ibadan

C
ar
ab
al

Olorunshogo

Oben

a
ut
ok
ja

Omotosho

(C

ELPS 2

ELPS 1

P
A

O
b3

Obiafu/Obrikom

Egbin

Aba Industries

Koko Gas
Industrial Park

Escravos

Obite

Ubeta

Alaoji
NIPP

OUR
Rumuji

NOP
L

Imo River

Indorama
GTS

GTS 1

Existing Pipeline System

G
N

Uquo

Alakiri
Notore
Alscon

Ongoing/Planned Pipeline system

Ibom
Power

Existing Gas Source

QIT

Power Plant
Industries

Unicem
Cement

Calabar
NIPP

Legend

Cawthorne
Channel

Obigbo

do
an
O
/
C

e
in
el
p
Pi

Bonny NLNG

Oso

Ongoing Pipeline Projects ELPS

Phase 1
Horizontal Directional Drilling Operation
across Warri Benin Express way

Lowering of welded line pipes at NGC

Right of Way through Jesse, Delta State

Welding activities for Ethiope River Crossing

11

Ongoing Pipeline Projects Alaoji,

Olorunshogo
Pipe stacked on Site

Offloading pipe on site

ROW Clearing

12

Roadmap to Securing Alternative

Funding for Pipelines
Sept 2011

Assess Pipeline
Tarif

Dec 2011

Review Tarif
Afordability

Jan 2012
Review
revenue
securitisation

Jun 2012

Source for
Investors

Dec 2012
Secure
Financial
Closure

Description
Assessment of
pipeline tariff
required to make
3rd party financing
viable this study
now completed by
NNPC

Engagement of
stakeholders (e.g.
NERC) on
affordability of
tariff and
implication for
medium-term
MYTO

Checking of
possible tariff
revenue
securitisation to
make 3rd party
financing
bankable

Road show to
attract investors /
financiers, selection
of willing
financiers/investors

Investors secure
financial closure

13

Gas to Power Supply Outlook

14

New Gas Sources of Gas to Bridge

Gap
New sources of gas, hitherto not considered for domestic market
e.g. bringing ofshore PSC gas to shore, are being evaluated. This
could add 400-500 mmscf/d by 2016/17
1

Koko

Erha Bosi - Development of offshore

processing plant with offshore pipeline
to transport about 400mmscfd of gas
currently being re-injected to the
western CPF in Koko.
CAMAC Oyo Field Development
Following options are being looked to
monetized the currently re-injected 100200mmscfd gas in Oyo field :
a.

Offshore pipeline from Oyo to

the western CPF in Koko

b.

Offshore pipeline to ELPS via

Chevron Okan gas processing
plant

c.

Offshore pipeline to OGGS

1
2

15

Conclusion
We have an enabling policy framework is in
place to support critical mass of gas supply
development for the power sector
Very good progress being made in development
of a robust gas grid that will enable rapid
growth of supply from diverse sources
increasing the liquidity of supply
Medium term outlook is promising and power
sector investors can be assured of supply
16

APPENDIX

17

Changing Power Demand

18

Overview of the Nigerian Gas

Industry
Gas Resource Base
Nigeria has a huge economic potential trapped in this vast natural
gas resource
Proven Natural Gas Reserves, 2010
1,800

1,680

1,600
1,400
1,200
1,000

1,046
899

800
600
Trillion cub ic feet

400
200

265 263 245

199 187 176

159

600TCF Undiscovered Potential

Source: EU Energy Portal; Transparency International, 2011

Report on Oil and Gas Companies

19

Enabling Sector Policy

Stimulating Supply
To support the agenda, a set of enabling policies were approved by
His Excellency, Dr. Goodluck Jonathan. These are being rolled out
and have created a major boost and jumpstart for the sectors
agenda

Scalable
Gas
Infrastruct
ure
Blueprint

20

Strategy Aggregator Company:

Gas Aggregation Company Nigeria
(GACN)
GACN was established to manage the Domestic Supply Obligations
Facilitate gas access and aggregation of gas pricing

Gas Aggregation Company

Nigeria (GACN) Contact
Details:
Office: #1B Malcolm Fraser
Street, Asokoro, Abuja
Telephone: 098759045
Email: info@gacn-nigeria.com
21

Status of Major Infrastructure

Projects

22

Eastern Network Pipeline System

Completion of the NOPL pipeline in 2012 will unlock stranded gas from MPN
(100mmcf/d); NAOC Ebocha (50mmcf/d) and TEPNG (60mmcf/d), bringing
them to Obigbo Node hub from where Alaoji and other Eastern Power plants
can be supplied

23

Eastern Network Pipeline System

24

Gas to Power
Our eforts in Power are focused on meeting a projected 3.5 bcf/d
of gas demand by over 30 existing and proposed power plants.
1

PHCN
PHCN
818
818 mmscfd
mmscfd

NIPP
NIPP
1,297
1,297 mmscfd
mmscfd

JV
JV IPP
IPP
322
322 mmscfd
mmscfd

Egbin + AES
Delta IV
Sapele
Olorunshogo
Omotosho
Geregu
Afam I-V
Olorunshogo
Sapele
Geregu
Omotosho
Ihovbor
Egbema
Gbaran
Chevron
Omoku Agura
NAOC,
Alaoji Okpai
Total,
Obite
Calabar
Shell, Afam VI
ExxonMobil, QIT

Power Sector Gas Demand

3rd Party IPP

JV IPP

NIPP

3500

3000

2500

2000
mmscfd
1500

up
S
s
Ga
ow r
r
G we
Po

y
pl

to

1000

500
rd Party IPP
3
3rd
Party IPP
531
531 mmscfd
mmscfd

Numerous 3rd party IPP

in consultation with the
Bulk Trader

0
Q4 2011

2012

2013

2014

2015

25

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 and manage 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

26

Due Diligence General Process

27

Map showing critical Infrastructures

28
28

Critical Pipeline Projects

29