Engr. Gbenga Komolafe, CCE NUPRC
…Countries are establishing carbon neutrality targets in a global shift towards sustainable and low-carbon energy landscape.
…Between 2020 and 2030, demand for gas is expected to grow at a compound annual growth rate of 16.6%.
-Felix Douglas
Delivering his special Industry Address at 2024 Association of Energy Correspondents of Nigeria (NAEC), annual conference, the Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, was of the view that it is a unique event with an array of professionals in the energy space.
“I stand before you, therefore, with immense pride and a profound sense of responsibility as the regulator of the Nigeria’s upstream oil and gas today. The Conference, I believe, will undoubtedly enable us to explore the vast opportunities presented by the Decade of Gas programme which seeks to position natural gas as a key driver of economic development, energy security, industrialization, and environmental sustainability in Nigeria.
Komolafe appreciated NAEC for keeping the tempo in bringing to the fore topics that are cogent to annexing and developing Nigeria energy sources.
He said the post-Paris Agreement era has witnessed a growing recognition of the urgency to combat climate change. Consequently, more and more countries, and entities are establishing carbon neutrality targets, which in turn have resulted in a global shift towards a more sustainable and low-carbon energy landscape.
This has also brought about decline in oil and gas investment as investors and financiers face mounting pressure from various fronts. Moreso, at COP28 Summit held last year in Dubai, world leaders agreed to work together to triple the global renewable power capacity by 2030. Interestingly, at the same Summit, the global leaders revealed their intent to work collaboratively and expeditiously “…taking into consideration different starting points and national circumstances”, thereby paving the way for Nigeria to adopt transition pathways that recognize its economic landscape and national situations.
Engr. Komolafe added that the blueprint for various pathways to energy transition aligns perfectly with national stance on “just transition”. Whereas the global imperatives for energy transition is clear and justified, the need for Nigeria’s energy security, economic development and prosperity cannot be overemphasised.
The agenda for Nigeria, and other resource rich developing economies is that the evolving energy dynamics must be calibrated against geography, history, and politics as well as the need for energy justice, equity, inclusivity, and sustainability. The new dynamics in the global energy arena necessitate that Nigeria, a country long dependent on the exploitation of oil and gas as the mainstay of its economy, re-examine its strategy to secure a blossoming energy future while meeting the global climate goals.
“The future we envisage for the petroleum industry is one that should assure for the utilization of Nigeria’s endowed natural hydrocarbon resources for shared prosperity, energy accessibility, affordability, sustainability, security as well as energy independence and energy sovereignty which are the cardinal pillars of the Nigeria Energy Transition Plan. Government has therefore declared natural gas as our immediate transition fuel because it provides a cleaner alternative to oil and coal, emitting significantly fewer greenhouse gases while maintaining the reliability needed to power industries and homes.”
According to the NUPRC boss, unfolding event has equally shown that natural gas is Nigeria’s destination fuel, with a projection that gas will form a significant part of energy mix for Nigeria by year 2030 and beyond. In recognition of this, government has designed a programme that ensures that gas actually plays a role to lift the country from challenges that confront it in order to drive industrial development: 2021 to 2030 was declared as the Decade of Gas.
“At the heart of the Decade of Gas programme is the vision to drive infrastructure and industrial development of Nigeria in order to prosper our citizens and make life more meaningful for all. The work done so far has aggregated the gas demand and supply views, infrastructure requirements and the suitable pricing framework which will serve as the enabler for unlocking the investments required.”
This in turn will drive the convergence of demand and supply. That work reveals that growth in gas demand outstrips supply, driven largely by growth in domestic demand which was enabled by an improvement in domestic supply obligation.
Komolafe said between 2020 and 2030, demand for gas is expected to grow at a compound annual growth rate of 16.6% p.a. and Nigeria may face “…an impending gas supply crisis with potential shortfall of 3.1 bcf/day by 2030” in the ‘Base Case Demand and Supply’ scenario.
Natural gas production is projected to increase from 8.0 bcfd in 2020 to 12.2 bcfd in 2030 driven by major projects such as NLNG Train 7 & Train 8, Nigeria/Morocco pipeline, Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project etc in the ‘high case supply’ scenario.
However, this will not meet the ‘high case demand’ scenario projected at 22.2 bcfd in 2030. In just a decade, the demand landscape could change exponentially, especially if the power sector challenges are resolved. The import of this is to showcase opportunities in gas development in Nigerian upstream sector and the need to complement hydrocarbon developments with renewables.
Komolafe made it clear that NUPRC as upstream industry regulator, through the instrumentality of the Petroleum Industry Act (PIA), is at the forefront of the drive for interventions required to realize the Decade of Gas by enabling investment in cleaner hydrocarbon development through gas development as well as driving programmes such as Nigerian Gas Flare Commercialisation Programme (NGFCP) for flare elimination and gas monetization to foster energy sufficiency, eliminate wastages while simultaneously attending to the urgency of reducing carbon emissions.
The significance of this is that more gas would be available for domestic utilization as Liquefied Petroleum Gas (LPG), feedstock for power generation plants, fertilizer plants and petrochemicals to mention but a few. Each of these areas provides a unique entry point for willing investors.
Engr. Komolafe told participants at NAEC conference that the global energy transition is not just about technology and markets; it is deeply political. As a member of the global community, Nigeria’s energy future faces three interwoven challenges or trilemma of finance, energy security, and international politics.
In navigating these challenges, Nigeria under the visionary leadership of President Bola Tinubu and Minister of Petroleum Resources, has embarked on a transformative agenda that aligns with the most stringent global standards and commitments.
The recent Presidential Executive Orders issued in March 2024, has been complementary to the PIA 2021 in improving efficiency of Nigeria’s oil and gas sector and enhancing its global competitiveness for higher rate of return on oil and gas investments.
Komolafe affirmed that despite challenges posed by climate calls, Nigeria is confident that investors will leverage sustainability mandates in PIA as well as generous fiscal incentives.
The Commission Chief reiterated energy security is the cornerstone of national development. “For Nigeria, this means ensuring that our growing population has access to affordable, reliable energy while maintaining a balanced energy mix that protects us from volatility and geo-politics in global markets.”
Nigeria as a nation is suitably positioned to become a superpower in the unfolding energy transition regime given its population of over 200 million people, huge gas resources and other abundant energy sources to achieve the right energy mix for powering her sustainable energy future.
“As we discuss and deliberate today on pathways to our collective energy future, it behoves on us to accept the proceedings of this NAEC Conference as a call for action and a charge for enhanced collaboration in unlocking the vast opportunities in Nigeria for energy security and shared prosperity.”
Comment here