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HOME > INVESTMENT OPPORTUNITIES (An Introduction) > Gas Sector
Nigeria's Gas Sector: Investment Opportunities(Posted 30th Jan, 2002) Tell your friends about this page! Email it to them.
Natural Gas reserves in Nigeria are, in energy terms , at least twice that of crude oil reserves, natural gas being in the region of 124 trillion cubic feet (TCF). At present utilisation levels, this will last for over 100 years. Natural Gas is a naturally occurring gaseous mixture of hydrocarbon gases found in underground reservoir. It consists mainly of methane (70% - 95%). With small percentages of ethane, propane, butane, pentane and other heavier hydrocarbons with some impurities such as water vapour, sulphides, carbon dioxide, etc. The ethane, propane, butane, pentane etc, hydrocarbon components of natural gas are collectively called natural gas liquids (NGLs). These NGLs are found in larger quantities in associated gas streams than in non-associated gas streams.
Natural gas is a versatile and environmentally preferred fuel as it produces no soot or ash, nor pollutants and as such has a major role to play in alleviating air pollution problems. It is also cheaper than most competing fuels and has become a major source of energy for both commercial and industrial consumers as well as a chemical feedstock for numerous processes.
Investment Opportunities in The Natural Gas Sector
There is a host of investment opportunities in the Natural Gas industry;
Production of Natural Gas
Interested entrepreneurs can apply to the Ministry of Petroleum Resources for appropriate licenses, to prospect for and produce oil and gas. Attractive fiscal regimes to ensure profitability of this aspect of the gas industry as recently approved by government include, but not limited to the reduction in petroleum profit tax from 85% to 65.75%.
Natural Gas Distribution
Investors are encouraged to wholly and independently own and operate natural
gas distribution systems. These companies would purchase gas from NGC at various
City Gates, and distribute the gas through pipelines for sale to individual
domestic and industrial consumers in a specific area. There would also be
opportunities to distribute gas as
CNG Automotive Applications
As the use of CNG as an automotive fuel becomes commercialised, there will be opportunities to invest in CNG filling stations. There will also be need for conversion workshops to convert vehicles from petrol/diesel to CNG operations, and for retail outlets to sell the CNG conversion kits.
Natural Gas Liquids
Natural Gas Liquids could be recovered from gas streams, which are richer in heavier hydrocarbons (ethane, propane, butane, pentane, etc.). These liquids have high market values and find applications either in their raw form solvents, feed stocks (for production of various chemicals) and liquid fuels or fractionated into their components, viz Liquified Petroleum Gas (LPG), Cooking Gas, natural gasoline, and various Special Boiling Point (SBP) solvents. Opportunities abound for interested third parties or private sector to invest in the establishment of NGLs extraction plants to recover natural gas liquids from major supply schemes.
Natural Gas Fired Equipment & Accessories
Natural gas is the cleanest, most convenient form of fossil fuel, and it is also cheaper than its competitors - fuel oil, diesel, and Liquefied Petroleum Gas (LPG). It is, therefore the prime choice for industrial processes of heating and drying, cooking, and baking of foods etc. This provides opportunities to invest in the marketing and servicing of gas-fired heaters, dryers, ovens, air-conditioners refrigerators and kilns etc, for a whole variety of industries.
Natural gas is a favoured feedstock for many chemical processes e.g. to make methanol, ammonia, urea fertilizers, etc. The Nigerian Gas Company would want to encourage entrepreneurs to invest in such project, for which NGC would assure regular and interrupted supply of natural gas.
Typical Levels of Investment
In the natural gas industry, these range from the very large e.g. for exploration and production facilities in the order of hundreds of millions of dollars to quite modest amounts on the marketing side.
It has been established, that Nigeria is blessed with abundant reserves of natural gas. Prospects for the growth of the gas industry are enormous when viewed from the various industrial and commercial consumers that need to be served and the potential local market available for chemicals derived from natural gas, which are currently imported. The Federal Government through Nigerian National Petroleum Company, NNPC and its subsidiary, NGC, is committed to promoting and providing favourable economic environment to allow private companies (Local & Foreign) to participate in Nigeria's gas industry.
To recapitulate, the following investment opportunities are available and private companies are highly encouraged to invest in such ventures.
Options available here are for the interested private parties to invest either solely or in partnership with NGC to set up the recovery plants and market the product locally or externally.
FOR FURTHER ENQUIRIES AND INFORMATION, CONTACT:
1. Managing Director, 2. Manager,
3. Head, Port-Harcourt Commercial Office,
4. Head, Abuja Commercial Office,
5. Head, Lagos Commercial Office,
6. Head, Public Affairs Department,
Source: Nigerian Gas Company Limited.
See Also: Oil Industry
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