The Federal Government has said it will require N4tn to drive the gas expansion plan in 10 years.
A document on ‘Nigeria’s Cretaceous Basins: The Potentials for Gas’ by the Nigeria Upstream Petroleum Regulatory Commission obtained by The PUNCH on Monday, said the sum would be needed for incremental investments from 2021-60 to reach net zero by 2060.
A breakdown of the N4tn revealed that the plan would require about N2.7tn ($6bn) as an additional cost that would be incurred for the application of what it termed “carbon capture and storage” in refining, and then about N1.9tn ($4bn) for gas expansion.
The document further stated that to achieve the plan, there would be minimal capital expenditure beyond the usual spending due to the oil sector decline despite the gas increase.
FG, however, said operational expenditure savings were expected due to efficiency improvements as part of the transition plan.
The gas expansion plan is part of the Federal Government’s energy transition plan towards delivering its 2060 United Nations mandate towards reaching net zero.
The government had earlier said it needed a total of N834tn ($1.9tn) to attain net zero by 2060 as part of its support to the global fight against climate change and meeting the country’s targeted energy transition plan.
To kickstart the implementation of the ETP, the Federal Government said Nigeria would raise an initial $10bn support package before the COP27 held in Egypt last month.
It also said a $23bn investment opportunity had also been identified based on current in-country programmes and projects that are directly related to just the energy transition.
A breakdown of the required spending by sector showed that $135bn will be spent in the infrastructure sector, $150bn in the power sector, $12bn in the oil and gas sector, $21bn in industry, $79bn in the cooking sector, and $12bn in the transport sector.
FG said these sectors were the key sectors where the emissions were the highest at 65 per cent and required reduction.
It said most of the effort will be needed in the power sector where an extra CAPEX is needed to finance the power sector generation capacity projected to cost $270bn, and the transmission and distribution infrastructure to require $135bn investment, including gas T & D infrastructure and electric chargers.
According to the document, significant savings in terms of fuel costs for power considering the switch to 90 per cent renewables will cost $121bn to compensate for some of the CAPEX increases.
FG said the net-zero pathway will result in significant net job creation with up to 340, 000 jobs created by 2030 and up to 840, 000 jobs created by 2060, driven mainly by the power, cooking and transport sectors.
It also said the gas will play a critical role as a transition fuel in Nigeria’s net-zero pathway, particularly in the Power and Cooking sectors.
As part of the gas expansion plan, NUPRC said it had identified 213 gas blocks, which it said is open for investments.
According to the document, 69 of the blocks were discovered in the Niger Delta basin, 12 in Anambra, 41 in Benue Trough, 17 in Bida, 40 in Chad, 6 in Dahomey, and 28 in Sokoto.
Already, the country has 60 gas basins under the Oil Prospecting Licenses- 44 in the Niger Delta, five in Anambra, two in Benue Trough, six in Chad, and three in Dahomey.
There are also 115 gas wells already allocated under Oil Mining Licenses OMLs- 112 in the Niger Delta, two in Anambra, and one in Dahomey.
Reacting, the immediate past Director General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, said, “That is a tall one. Where will the money come from? That target is ambitious and aspirational but again, because we are looking at a long-term thing; we must not totally dismiss it. With what is happening globally; you can see that the pace of decarbonisation has slowed. Countries that are committed to a more aggressive push are going back to fossil fuels- looking for coal. I am not optimistic that raising such an amount will be easy. Then the commitment to the COP is also not too impressive and very weak. And if commitment is this low, how do you convince investors either in form of aid or whatever, to invest this kind of huge money? It’s going to be a tall order.”
The NUPRC said Nigeria’s cretaceous basins hold a promising future for the Nigerian oil and gas industry and presents a pathway for Nigeria to decarbonise while ensuring energy security, adding that further exploration of the other cretaceous basins will deepen and realise the potential for Nigeria to triple its gas reserves by 2050.
“Currently, exploration efforts through the Frontier Exploration Services of NNPC Ltd, over 1000 km of 2D Seismic Data have been acquired for the first time across Bida and Sokoto Basins to explore their hydrocarbon potential”, the document said.
An independent researcher and development expert and Consultant in the oil and gas sector, Dr Dauda Garuba, said the management of revenue from its natural resources should be the topmost concern for the country rather than discoveries of wells which at the end of the day, might end up being stolen after exploration.
“Gas is touted as the transition mineral. Nigeria is richer in gas than oil. I see much more to be discovered. However, we should be more concerned about the management of earnings from this,” he said.
On his part, a Nigerian academic economist and professor of Economics at the Olabisi Onabanjo University, Sheriffdeen Tella, lauded the Federal Government’s plan to reach net zero by 2060.
“It is good to work towards zero gas emissions. The given figure is an estimate over time and must have been based on expert advice,” he told The PUNCH over the phone.
