Nigeria has abundant gas resources currently estimated at over 159 trillion cubic feet (TCF) made up of roughly equal amounts of associated and non-associated gas. This ranks Nigeria as the tenth largest gas province in the world and is second only to Algeria in the African continent. Presently, Nigeria produces an average of 5.5 BCF per day out of which about 2.6 BCF per day or over 40 percent is utilised.
With gas-targeted exploration and appraisal programmes, the Nigerian gas resources are expected to increase beyond the present level. With the planned supply and utilization programmes, Nigeria will soon be included in the list of top twenty gas producing and utilizing countries in the world.
The prospects of gas development in the country have improved with fiscal incentives, national gas policy now in place, move towards a deregulated petroleum products market and the Nigerian government proactive steps in encouraging gas development projects for domestic use and for export. Associated gas is also being processed for export of LPG and LNG.
In Nigeria and the African continent, the prospects for gas projects are excellent especially for power generation. There is considerable room for electricity demand to grow since the current consumption in Nigeria is 85 kWh/capita, which is far below the expected 425 kWh/capital. A high demand for gas-fired power plants and encouragement for Independent Power producers to supply power to the national grid is, therefore, inevitable and is being actively encouraged.
Using a growth factor of 2.5 per decade, which equates to a 10 percent annual growth rate, as a base estimate, gas consumption by power sector in Nigeria could increase to 1.35 BCF per day in 2010 and over 3.8 BCF per day in 2020. The Nigerian power sector is currently going through deregulation.
The West African Gas Pipeline Projects estimated at US$400 million will supply between 100 and 150 million cubic feet per day of gas from Nigeria to neighbouring West African countries at a cost saving to them of about US$500 million in energy for over 20 years. The abundance of gas resources in the country coupled with the present low utilisation of gas for power generation indicate the need for new power generating capacity additions.
The development of a comprehensive gas policy and generating capacity additions will enhance future investments and market development in Nigeria and the West African sub-region.
The first major gas discovery in Nigeria was made at Afam in 1956, the same year that Oloibiri oil field was discovered. This discovery, which has a gas reserve of 850 BCF, was incidental to exploration for oil as is the case for all gas discoveries in Nigeria. Other important gas discoveries, such as