Enhancing the Role of Natural Gas In Sustainable Development Group Managing Director, NNPC Mallam Mele K. Kyari 2 nd GECF International Gas Seminar Malabo, Equatorial Guinea 27 th November 2019
Table of Content Setting the Context The energy spectrum and the disparity Re-energizing the African economy using the appropriate energy sources The Nigerian Case Study Concluding remarks 2
Setting the Context – Sustainable development framework Environment Economic Emission mitigation, GDP growth; stable climate change, Mgt of and resilient biodiversity, etc. Sustainability systems Social Food/water security, poverty eradication, equal opportunity etc. Sustainable development entails harmonious co-existence between the 3 pillars to achieve sustainability This is according to many international documents e.g. UN 2030 Agenda for Sustainable Development, Paris Climate accord, etc. From energy perspective, this is achievable via the use of reliable energy sources such as natural gas and their responsible exploitation to enhance socio-economic development while protecting the environment and the ecosystem 3
Setting the Context – Growing dynamism in the natural gas sector Export/trade 0.94 Tcm, ~24% LNG 0.43 Tcm, 46% 0.51 Tcm, 54% Inter-regional Pipeline Production ~3.9 Tcm Resources and Reserves Remaining technical resources:796 Tcm Proven Reserves: 197 Tcm Domestic/intra-regional trade 2.93 Tcm, ~76% Power, heating, etc. Re-injection Own use, etc. Growing gas production and supply underpinned by rising shale/tight oil/gas production and trade (LNG and pipeline gas) Technologies such as F-LNG helped in unlocking gas resources, etc. Impressive production performance from existing LNG plants and production ramp up from the new projects in US, Russia & Australia Cyclicity in LNG market conditions creating opportunities with ~ 63 MT of LNG projects FID taken in 2019 (up to Q3) More FIDs expected including our N-LNG T7 before the year ends to ensure enough supply to meet the projected rise in LNG demand around 2024 driven by Asia 4 Data: Wood Mackenzie, BP, IEA
Why Natural Gas? It has the credentials in support of SDGs The resources can last for > 2 centuries at Able to compete internationally with other fuels current production levels (~3.9 Tcm) depending without subsidies and its environment premium on technology, prices and policy Affordable appropriately considered Vast Resources Clean & environmetally Natural Gas friendly Emits fewer emissions when burnt (e.g. N.G. emits 117 lb of CO 2 per mmBtu of energy vs 206-229 lb CO 2 per mmBtu for coal); no/low pollutants e.g. NOx, etc. Versatile Flexible Direct source of energy (e.g. power generation), Piped, liquefied, compressed, sequestered/stored feedstock to gas-based industries and its derivative and a sustainable complement to other fuels such as such as LPG use for clean cooking renewables 5
The Energy Spectrum and the disparity (1/2) Growing energy consumption due to fairly strong economy, population growth and weather conditions è ~ 3% y-o-y growth in 2018 surpassing the last 10-yr CAGR of 1.7%; The share of natural gas in the global primary energy mix is growing while that of coal declining, but still coal has 27% share in 2018, ahead of all primary fuels except oil Marked energy consumption in Asia Pacific, but with 48% of its primary energy consumption from coal CO 2 emissions is high Despite its large population and resources, Africa has the lowest energy consumption by region ( 15 GJ/cap ) compared to the global average of 76 GJ/cap in 2018 This energy growth and CO 2 emissions based on the current energy configuration could impact sustainability 6 Data: BP , WB, IEA, Climate Action Tracker
The Energy Spectrum and the disparity (2/2) … is Africa the darkest Continent? Source: Geosciences News and Information Surging electricity generation, at +3.7% y-o-y in 2018 with generation from coal leading at 38% share and associated 10 Gtons CO 2 emission from burning coal Despite the growth in electricity generation, ~1 billion people are without electricity access and 2.7 billion use primitive forms of lighting and cooking facilities Africa has ~ 600 million people without electricity access mostly in the rural areas with access rates as low as below 20% 7 Data:: BP (June 2019), IEA
Access to Electricity by African Countries In Africa, electricity access rates § range from below 20% in Liberia, South Sudan, Niger & DR Congo to more that 50% in Senegal, Botswana and above 75% in South Africa, Algeria, Egypt and Morocco. More than 90million people in § Nigeria (55% of population) do not have access to grid electricity This has resulted in an § unprecedented power demand growth in West and Central Africa. This is a huge opportunity for Investment Source : IEA 8
Focus areas to improve Africa’s economy using the appropriate fuels Power supply q Integration of the domestic/regional power pools to improve access across the continent (baseload supply) q Utilize native energy sources to serve remote population not Gas and Power reachable via on-grid power supply economically (small hydro, off- Develop and integrate gas and power infrastructure networks (increase q grid/mini-grid, home solar solutions, etc.) interconnectivity) q Use natural gas to increase the uptake of renewables due to their Stimulate gas demand (power generation, feedstock, transport, etc.) q intermittency Set up regional gas trading hubs (transparent & market driven prices) q Regional/sub regional cooperation q Sufficient planning to provide adequate energy infrastructure in tandem with the expanding population growth and Expand natural gas resource exploitation economic activities q Capitalize on the experience of key players in the region to grow q Collaboration amongst regional and international production efficiently organizations on key sectors such as energy q Technology acquisition and project financing across the value chain q Explore frontier locations for more oil & gas discoveries q Develop energy related policies and investment packages to attract FDI q Promote transparency and accountability and performance excellence (TAPE) 9
Contributing to Africa’s Industrialization Our initiatives…. Nigeria – Morocco Gas Pipeline West African Gas Pipeline (WAGP) Power Plant Fertilizer Plant Manufacturing Industry Planned/Ongoing Gas Pipeline Existing Pipeline WAGP When the enormous Natural Gas Reserves in Nigeria is efficiently harnessed, it would enable accelerated electrification across the region in order to meet the substantial energy deficit and also increase our fertilizer production significantly thereby boosting the productivity of the agricultural sector. 10
….And a growing gas market in Nigeria Domestic/regional (Power, Industries & WAGP): 1.3 16% Bscf/d 44% Export –LNG/ GTL/NGLs: 3.6 Bscf/d Re-injection & other operational usage 31% 2.5 Bscf/d Gas Production • 8.1 Bcf/d 9% Flared gas: 0.7 Bscf/d Vast natural gas resource: 2P gas reserves of 201 Tcf, ranked 10 th globally & 1 st in Africa; Undiscovered potential of ~ 600TCF (USGS) A key gas exporter (LNG/GTL) with 44% of its daily production exported, 47% consumed internally while flaring has drastically reduced to ~9% Base Case domestic gas demand to reach 7.4bscfd by 2027 driven by the power sector to improve electricity access and to substitute the small-scale generators to reduce emissions (pollution) Nigeria’s LNG export capacity to reach 30 MTPA by 2024 and with our scheduled FID for the 8 MTPA N-LNG Train 7 before the end of the year 11 Data: NNPC Aug 2019
Recent efforts in Nigeria/NNPC towards positioning natural gas for sustainable development Policies and regulations Flare Gas Regulations (2018) The National Gas Policy (2017) Nigeria’s Petroleum Industry Bill (PIB): Reduce environmental and social impact The 7 Big Wins Initiatives (MPR) and the Policy and actions of the Nigerian Govt. in due to gas flaring, protect the environment, Expand economic growth via improved National Economic Recovery and Growth the natural gas sector medium to long - term prevent waste of natural resources and revenue flows from the oil/gas sector and Plan (ERGP 2017-2020) resource exploitation growth and utilization create social and economic benefits from make the industry efficient and competitive gas flare capture 7 Critical Gas Development Projects: harness gas resources and provide infrastructure to add 3.5 Bscf/d of gas to the domestic gas markets Key projects to support domestic Domestic/regional gas pipeline and facilities projects e.g. AKK (support 3.6 GW power gas expansion projects), OB3, Nigeria-Morocco Gas Pipeline (NMGP) project etc.; and pipe Expansion of Nigeria LNG capacity from 22 MTPA to 30 MTPA by 2024 to capture gas/LNG export international gas market opportunities potentials Development of gas- based industry parks/hubs such as petrochemicals, fertilizers, etc. to add value to the natural gas 12
Recommend
More recommend
