Chief Operating Officer of Seplat Energy, Samson Ezugworie, has said that the company is set to increase its gas production capacity by an additional 390 million standard cubic feet (MMSCF) by the end of the year.
Ezugworie held on the sidelines of the Oil Technology Conference (OTC) in Houston, Texas, on Wednesday.
The forum’s theme was: “The Future of Energy Transformation in Africa: Clean Energy and Business Sustainability.”
He stated that the additional 390 MMSCF of gas would be added to the current 460 MMSCF per day, bringing the total to 850 MMSCF per day by the end of the year.
According to the COO, the company is currently producing 460 MMSCF of gas per day but plans to ramp up production to 850 MMSCF per day by the end of the year when the Assa North Ohaji South (ANOH) and Sapele Gas Plants come on stream.
He emphasized that the entire 850 MMSCF of gas would be dedicated to the domestic gas market to support economic growth.
He further explained that injecting 850 MMSCF of gas would significantly address issues surrounding gas-to-power, as gas produced from the Oben gas plant feeds directly into the national grid, thereby boosting power generation capacity.
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Piling Debt Crippling the Gas Sector
On the issue of gas pricing and debt, the Seplat boss noted that this remains a significant issue in the industry, discouraging most International Oil Companies (IOCs) from investing in gas.
He explained that this was because pricing needed to be properly addressed while, on the other hand, the growing debt for gas produced was a significant disincentive, making it a less profitable business.
He said the piling debt for gas produced was a major disincentive, making it a less profitable business.
‘‘But for us at Seplat, what has played out for us is in the areas of strategy and foresight because we clearly know that even if you owe today, there is a chance that you will pay tomorrow because the issue about debt is clearing.
“Now, we are working ourselves into the interruptible gas supply and willing buyer willing seller contracts.
“In addition to that, what we are also doing is that we have a payment structure for those who are off taking our gas that ensures that going forward; we are not going to be having debts piling up. But then, have a structured way of paying outstanding debts.
“Though, it is a delicate balance because this is something we have to do to contribute to the growth of the country.
“At the end of the day, you will see that the profit margin is not that significant,” he said.
What you should know
Data from the Nigerian Liquefied Petroleum Gas Association (NLPGA) shows that Nigeria has a gas reserve of 209.5 trillion cubic feet, making it the world’s ninth-largest gas producer and Africa’s gas powerhouse.
- Daily gas production stands at 7.8 billion cubic feet, but 2.2 billion cubic feet of gas are re-injected daily. Meanwhile, daily gas consumption averages 1.5 billion cubic feet, serving domestic and commercial applications.
- However, the country exports 3.7 billion cubic feet daily to global destinations through the Nigeria Liquefied Natural Gas (NLNG) Limited and the West African Gas Pipeline (WAGP).
- Also in a recent interview, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC Ltd.), Mele Kyari, said that Nigeria has a huge opportunity to drive economic growth and industrial revolution by leveraging on its over 200 trillion Cubic Feet (Tcf) of Gas Reserves.
- Furthermore, Kyari said NNPC plans to increase the county’s natural gas reserves from over 200 trillion cubic feet to 600 trillion cubic feet.
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