Chief Executive of Oando Gas & Power, Bolaji Osunsanya, has said Nigeria needs to increase natural gas price for power plants to further help encourage more gas exploration and production.
Nigeria has the ninth largest proven gas reserves in the world at 187 trillion cubic feet, tcf but exports around 35 percent of its gas production, loses 48 percent to flaring and reinjection and consumes just 15 percent domestically.
However, its domestic gas demand is expected to rise to over 10 billion cubic feet, bcf a day by 2020 from around 2 bcf/day now and around $55 billion of investment is needed in exploration activities, new processing facilities, pipelines and transmission and distribution networks.
To help encourage increased production by companies, the price of gas for power plants has been increased to $2.50/tcf.
The CEO, Oando Group subsidiary Oando Gas & Power and President of the Nigerian Gas Association, who spoke to reporters at a briefing in London on Friday said this is However not enough.
“We don’t see a big rush (of activity) even at $2.50. People argue anything upwards of the $3 mark would probably start to incentivise exploration and production. On a netback basis, they argue it should be close to $4 or $4.50,” he added.
The new President of Nigeria, Muhammadu Buhari, was sworn in on Friday and Osunsanya hope the administration will speed up measures to bridge the supply gap, focusing on funding, infrastructure and pricing.
Nigeria’s electricity generation is often much below capacity. The country’s power plants were built before the necessary infrastructure to transport the energy fuel, meaning gas often cannot be delivered, resulting in regular blackouts.

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