Midstream

We must provide Nigerian operators with a modular approach to gas commercialisation

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by Kayode Adeleke, CEO, RusselSmith

Nigeria has made significant efforts in reducing the flaring of associated gas over the past few years. However, we are still a long way from eliminating routine flaring in the country, and too much gas remains wasted and burnt into the atmosphere.

Whilst commendable initiatives such as the Nigerian Gas Flare Commercialization Programme (NGFCP) have been put in place by the government to monetize associated gas, the private sector needs to step up and find new ways to build the processing and monetization infrastructure that we need to extract as much value as possible from our gas.

Globally, the oil & gas industry has succeeded in finding ways to transform even the smallest quantities of gas into commodities such as diesel, naphtha, LPG, CNG, or LNG. With its vast gas reserves, Nigeria offers a fertile ground to adopt such innovations, and the Nigerian services industry has an important role to play in introducing world-class gas processing technologies to the Nigerian market.

A key challenge to the elimination of flaring in Nigeria is the proliferation of flare sites across the Niger Delta, which have made it more difficult to access or aggregate gas. However, this challenge presents unique opportunities for service companies to deploy modular and small-scale gas processing solutions from an off-take as small as 2 MMscf/d.

Nigerian services companies are particularly wellplaced to take on such a responsibility, given the strong capacity that they have built over the past decade. Their ability to attract and work with global technology providers can help turn the country’s gas into valuable commodities for its industries and its economy.

Nigeria already has several success stories of local companies working with global partners to monetize flared gas. With the recent introduction of the Petroleum Industry Act (PIA), now is the time to build on these successes and take them to the next level.

At RusselSmith, we see tremendous prospects in gas, from small to large scale developments. In order to support the decarbonization of upstream operations and increase the availability of key products such as cooking gas, RusselSmith, through its gas subsidiary, G2L Energy Solutions, is notably working with an international partner to offer new and modular gas-to-liquids technology solutions to the Nigerian market.

Our commitment to improving gas commercialization is driven by a firm belief that the success of any industry depends on the ability of its service providers to be innovative and provide their market with sustainable solutions.

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Increasing LNG availability in Nigeria will support new sustainable development models for Nigerian industries

by Ken Etete, Group CEO, Century Group. Nigeria is one of the world’s biggest LNG exporters. Since the first train at Nigeria LNG was commissioned in 1999, the country has built a massive LNG export complex with a capacity of 22.5 million tonnes per annum (mtpa). Last year, it held a 6% market share of the global LNG export market and was the world’s 6th largest exporter of the commodity. But while Nigeria’s gas has benefited industrialization and power generation overseas, LNG has remained relatively absent of its domestic market. This is now changing along with the government promotion of gas as a transition fuel and increasing private sector investment into virtual gas pipelines. At the Century Group, we have always believed that gas was meant to play a bigger role in supporting Nigeria’s industrialisation and energy access. As early as 2011, we set up Gas Plus Synergy (GPS) to support the monetization of associated gas and reduce carbon emissions across the country’s oil & gas sector. In 2021, our efforts paid off with the signing of a Sales & Purchase Agreement with Nigeria LNG for the delivery of LNG to the domestic market. Moving forward, we will continue to expand Nigeria’s domestic gas value-chain, and are committed to incentivize the switching from diesel to gas across sectors such as manufacturing and transport. This will support new sustainable development models for Nigerian industries, and ultimately make the economy more resilient. As Nigeria recovers from a recession caused by the Covid-19 pandemic and crash in oil prices, there are several reasons to be bullish on the future of its domestic gas market. To begin with, the country has increasingly become aware of the potential to develop its 206 Tcf of gas reserves both for the domestic and for the export markets. The 2020-2030 period has been declared “Decade of Gas” and is seeing several incentives to boost gas monetization. Nigeria has also taken a clear stance in favor of gas even as it thrives to reach net 0 emissions by 2060. Market dynamics are also evolving in a favorable way and will be providing positive grounds to support gas adoption moving forward. Throughout the end of 2021 and first quarter of 2022, fluctuating commodity prices have sent diesel prices soaring, generating significant operational expenses for Nigerian industries that heavily rely on diesel for power generators and logistics. As a result, demand for cheaper and cleaner fuels such as CNG and LNG is growing. It is now up to Nigerian companies and financiers to step up and meet the needs of the hour.

In South Sudan, a private company has big ambitions to expand energy infrastructure

Since its establishment in 2012, Trinity Energy has grown into South Sudan’s largest independent energy business. The company is the first local entity to be registered to lift crude oil from South Sudan and has become one of the pillars of the country’s energy security. Its trading arm currently exports South Sudanese oil before re-importing finished petroleum products into the market. In March 2022, Hawilti spoke with Founder & Chairman Akol Ayii about South Sudan’s recovery prospects and Trinity Energy’s expansion plans.  How do you assess South Sudan’s recovery prospects in 2022?  The past two years have been challenging due to the headwinds presented by the COVID-19 pandemic. Besides the shutdowns in South Sudan as a market, there were also significant logistical challenges in importing petroleum products due to border shutdowns during the pandemic. This is because the majority of our refined products’ supplies are from the surrounding East African markets.  Needless to say, Covid-19 has impacted the demand for petroleum products in South Sudan, and altered the timeline of key projects within the energy sector, including that of our own refinery.  That said, the historic recovery of crude oil prices is now providing a boost to the country’s economy because oil revenues account for about 30% of the government’s budget. We expect a trickle-down effects across other sectors throughout 2022 and 2023.  In the year 2020/21, the Government hadalso made strategic investments in thebuilding or roads and highways. We arenow starting to see the positive impact ofsuch infrastructure spending across theeconomy. Meanwhile, we remain optimistic that as a result of the peace agreement and the implementation of the Government ofNational Unity, the business environment in South Sudan will continue to improve.In 2021, the IMF estimated South Sudan’s real GDP growth at +4.5%, with the forecast for this year revised upward to+6.5%. This maintains the country as one of Africa’s fastest-growing economies.  As the economy recovers, where do you see most investment opportunities in the oil & gas sector?  Oil revenues represent on average 25-30%of South Sudan’s budget so the sector iscritical to the wellbeing of the economy.The government has maintained itsambition to restore crude oil productionto pre-conflict levels of 350,000 barrels ofoil per day (bopd), which wouldsignificantly boost economic growth.  The energy security policy of the countryis two-folded: on one hand enhanceexploration activities and bring more oilwells into production, and on the otherset up South Sudan’s own petroleumrefinery.  As part of efforts to boost upstream activity, the country’s first licensing round since independence was launched in 2021. It is anticipated to be an economic accelerator spurring investments by international oil investors and service companies into the country’s emerging oil and gas sector. In that context, what updates do you have on Trinity Energy’s expansion plans?  Trinity Energy has already invested closeto $13m in the roll-out of its current retailnetwork of 20 fuel stations in SouthSudan. Our focus has been and remains onconstructing and acquiring an additional100 outlets in the country within the next4 years. We plan for 40 of these stations tobe in Juba, while the other 60 stations willbe spread in all the 10 states across SouthSudan.  As a key proponent of the Intra-Africa trade, we are also actively pursuing growth opportunities in East, Central, andSouth Africa. We already have a presence in Kenya and recently entered theDemocratic Republic of Congo. Moving forward, we are developing opportunities in Malawi, Somaliland, and Uganda and are launching four new fuel retail stations in Nairobi in the first quarter of 2022.  Another significant component of ouractivities is aimed at expanding ourstorage facilities in South Sudan. Wecurrently own 6 million litres of fuelstorage at our depot in Nesitu, with anadditional 2 million litres of storage underdevelopment. To further support ourgrowth strategy, we will be constructingan additional 50 million litres of storagecapacity in Koda, just outside Juba. Wehave also engaged Nilepet for theconstruction of a storage terminal inBentiu. We target to leverage these storage facilities to supply petroleum products into neighbouring countries includingEthiopia, the Central African Republic, and the D.R.C.