Jonathan Unfolds FG’s $25bn Gas Revolution Plan

 President Goodluck Jonathan

Nigerian Agip Oil Company (NAOC) and Oando Nigeria Plc are to jointly build a $3-billion Central Gas Processing Facility (CPF) in Nigeria, as President Goodluck Jonathan Thursday unfolded plans to attract $25 billion worth of investment into developing the country’s gas infrastructure and create about 600,000 new jobs.

The CPF project, which will be sited in Obiaruku, Delta State, is billed to be completed in 2012. 
The president made government’s plan known during the unveiling of its gas revolution agenda at the Banquet Hall of the State House, Abuja.

This is part of Federal Government’s ambitious agenda to fast-track Nigeria’s industrial rebirth through a gas revolution programme that would raise domestic gas supply to over 10 billion cubic feet per day by 2020 from the current level of 1.0 billion cubic feet per day, as well as end gas flaring.

The government also announced that it had signed a Memorandum of Understanding (MoU) with Saudi Arabia's Xenel Industries Limited to construct a world scale petrochemical plant also in Koko Free Trade Zone (FTZ), Warri Delta State with an output capacity of about 1.3 million tonnes per annum.

The domestic gas utilisation drive would also see Indian firm, Nagarjuna Fertilisers and Chemical Limited, team up with United States oil major, Chevron Nigeria Limited, to build five fertiliser blending factories across the geo-political zones of the country.
The factories, according to the facilitators, would utilise a substantial volume of the country’s huge gas resources.

In his remarks, Jonathan said the proposed gas initiative would generate over 100,000 engineering design-related jobs, as well as about 500,000 direct and indirect jobs in construction, logistics fabrication and agriculture.

“Today’s event marks the beginning of a fulfilling journey for Nigeria to move into the league of nations which have successfully leveraged on the advantage derivable from their abundant natural gas to positively impact on the lives of their citizens.

“Based on the agenda, it is our expectation that by 2014, we would have positioned Nigeria as the regional hub for gas-based industries of fertilisers, petrochemicals and methanol.

“The focus is to catalyse the industrialisation of the country by seeding in a few investments that have the highest potential of far-reaching multiplier effect on the economy. This agenda is expected to bring an end to gas flaring as we hope to monetise this. By 2014, we expect to have placed Nigeria on the pedestal as a regional hub for gas based industry,” the president said.

The Federal Government launched a gas master plan in 2008 under which oil companies operating in the country were required to make available a certain percentage of their gas production to the domestic market for electricity generation and fertiliser plants.

According to Jonathan, “the full implementation of the gas master plan agenda would result in about $25 billion worth of investment in gas prospective transmission and downstream gas utilisation project.”

He added that “the petrochemical industry would provide us with the potential to manufacture low-end plastic and packaging products and also very high end products.”

The president noted that Nigeria had proven gas reserves estimated at 187 trillion cubic feet (tcf) and a further undiscovered potential of about 600 trillion cubic feet (tcf).

Nigeria had in 2009 shortlisted 15 firms including Russia's Gazprom, E.ON Rhugas of Germany and Royal Dutch Shell to build three major gas processing facilities in the country.

Also speaking at the event, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said in order to grow the country’s gas potential, the Federal Government was developing the hydrocarbon potential in other inland basins in addition to reserves in the Niger Delta and offshore basins.

According to Alison-Madueke, between April 2010 when Jonathan launched an aggressive refocus on these various basins and now, about 531 square kilometres of seismic data had been acquired in the Chad basin.

She added that the Federal Government would spend $1 billion on oil exploration campaigns in the Chad, Gongola/Yola, Sokoto and Anambra Basins, as well as the Benue Trough over the next five years.

“The industrialisation agenda would not only form the catalyst for a major re-industrialisation of Nigeria, but will result in the most significant inflow of Foreign Direct Investment (FDI) of over $10 billion between 2012 and 2014, when all the plants become operational," the minister said.

She added that "with the dredging of the River Niger, we will be able to move Liquefied Petroleum Gas (LPG) around the country, bringing gas to the East, West and Northern parts of the country.”

Chief Executive Officer and Managing Director of Oando Plc, Mr. Wale Tinubu, said the gas revolution agenda of the government was a marked realisation of the value of the private sector driven initiative in industrialising Nigeria.

He explained that the Federal Government had realised the need to engage the private sector in its agenda to turn around the fortunes of the country, adding that the project would be completed on schedule.

Xenel is a diversified company based in Jeddah, Saudi Arabia. It was founded in 1973 by the four sons of Ahmed Alireza, who headed a locally renowned House of Alireza.

The company has established multiple joint ventures with international companies and in the process built expertise in energy, construction, infrastructure development, healthcare, industrial services, information technologies, logistics, real estate and global investing.

On the other hand, Nagarjuna Fertilisers and Chemicals Limited is a leading manufacturer and supplier of plant nutrients in India. It is the flagship company of the Nagarjuna Group, which commenced operations in 1985.

It currently has an asset base of around Rs. 21 billion and has the single largest private sector investment in Southern India.