Nigeria has the potential to generate revenue in excess of N1.2trillion from natural gas alone with proper and effective framework put in place.
Investigations have revealed that with the proper regulations put in place coupled with a commercial framework, the country would harness the full potentials of the bountiful natural gas found in the country.
Examining the various value chain of natural gas in Nigeria which includes gas to power, exportation and domestic use, the potentials are numerous. With effective structures put in place, the gas to power value chain has the potential to generate about 10,000 megawatts of electricity yearly. Also, in terms of exports, the country has the potential to export gas worth over $200million to neighboring African countries alone, talk more of other countries in Africa and the rest of the world.
Local consumption of gas also for domestic uses has a potential to generate over half a billion dollars yearly. Sadly, the country lacks the political will power to erect the correct frameworks to make these achievable.
In terms of regulations, the government is expected to create regulatory framework which would birth progressive policies that will attract investors into the sector. The most significant of them all would be a show of strong political will to end gas flaring or harness flaring to advantages of the citizenry. Currently, the penalty for gas flaring is not commensurate with the hazards being created and also with the benefits being derived by oil companies to the detriment of government and the citizenry.
In the past, the government through its Department of Petroleum Resources had tried to increase the fine for flaring gas but has failed. However, with the new “Nigerian Gas Flare Commercialization Program” being launched by the government, it is expected that the concept of gas flaring becomes more controlled with stiffer penalties to defaulters and incentives to compliant companies.
Although Nigeria has reduced gas flaring over the years from about 2 billion cubic feet per day to about 750million cubic feet per day today, there is still a loss of revenue of about $700 million lost yearly to gas flaring.
With the new regulation being rolled out by the government, major stakeholders has expressed great optimism that the gas industry will receive the much needed boost to actualize its true potentials by generating more revenue and creating more jobs in the economy.