Connect with us

Business

“Gas discoveries in Nigeria disappointing over the last decade” – PwC

Published

on

PwC

PricewaterhouseCoopers (PwC) has described gas discoveries in Nigeria as disappointing over the last decade despite the country being a major gas consumer. This is according to its November 2023 Africa Energy Review report.

The report noted that West Africa has experienced limited gas discoveries since 2019, but significant gas discoveries were made in Mauritania between 2015 and 2019 and Senegal between 2015 and 2016.

These two countries are currently in the process of monetizing their discoveries and are expected to begin operations in 2024.

The implementation of domestic gas allocation has the potential to decrease reliance on diesel generators and coal power generation.

It read:

The Algerian and Nigerian governments signed an MOU in 2022 regarding the 4,128KM Trans-Saharan Gas Pipeline (TSGP), which was first mooted in the 1970s.

However, the report noted that the project is still in the planning stages, and political instability in the region, investor funding concerns, and operational safety issues are all contributing factors to the additional delay.

Beginning in the Warri region of Nigeria, the pipeline is intended to traverse Niger before arriving in Hassi R’Mel, Algeria.

It will establish connections in Hassi R’Mel with the pre-existing Medgaz, Galsi, Trans-Mediterranean, and Maghreb-Europe pipelines.

The Nigeria-Morocco Gas Pipeline (NMGP), originally envisioned to traverse Nigeria, Benin, Togo, and Ghana, will be expanded to encompass the following countries: Senegal, Mauritania, and Guinea-Bissau, in addition to Guinea and Guinea-Bissau.

Establishing this would necessitate an enormous quantity of collaboration, coordination, and administration.

The anticipated duration may prompt the EU to pursue alternative gas agreements, particularly those involving LNG/FLNG, which can be expanded at a faster rate and a lower cost through modular expansion.

The report further noted that although Nigeria consumes a large amount of gas in the West Africa region, there is the challenge of inadequate infrastructure stifling the market growth in the country.

It read:

The power sector challenge in the country was also highlighted, with the report noting:

It, however, noted that the most populous nation in Africa, boasting a population of 219 million, presents the most advantageous prospects.

Its domestic market is pre-established, consisting of 17 cities with populations exceeding one million, despite the presence of numerous obstacles.

Government and business must continue to work together for the public benefit to address the most significant obstacles, which include legislation, corruption, governance, and transparency.

It further noted that in 2024, Nigeria will export approximately 79% of the gas produced, adding “However the 20% domestic gas will need to be carefully managed to ensure it is utilized for the public good.”

The report further commented on the prospects that come with the full operations of the Dangote Refinery, which is about give years behind schedule.

It noted that with the refinery fully running, the amount of refined product imported into Nigeria will likely reduce to below 20% while adding about $20 billion to $30 billion to the Nigerian economy.

The report read:

Trending