THE Federal Government on April 27, 2023 declared the value of Nigeria’s proven gas reserves estimated at about 206.53 trillion cubic feet, with a valuation of well over US$803.4tn, adding that the

country had the most extensive gas resource in Africa.

In September 2015 at the historic UN Summit; Nigeria along with many other countries adopted the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development. The European Union in more recent years proposed categorizing natural gas as a green energy source, as this would impact favourably on Nigeria due to the country’s abundant natural gas reserves.

SDG: (7) “Ensure access to affordable, reliable, sustainable and modern energy for all”

Natural Gas Forms

With the context provided above, can we now explore what this means in terms of natural gas forms; then we deep dive into actual value implementation and socioeconomic impact.

1. Piped Natural Gas (PNG): Known as dry natural gas, it consists primarily of methane and is suitable for distribution through pipelines for heating, electricity generation, and industrial use. Examples - The Escravos–Lagos Pipeline System (ELPS) built in 1989 to supply gas from Escravos in Niger Delta area to Egbin power station, The West African Portland Cement (WAPCO) Plants and a few others. In more recent times; The Ajaokuta–Kaduna–Kano Natural Gas Pipeline (AKKP) foreseen to transport natural gas from Ajaokuta, in Kogi State to Kano, in Kano State, through several states and urban centers, as part of the Trans Nigeria Gas Pipeline. Good initiative, the Chinese have this contract- we wait and see.

2. Liquefied Natural Gas (LNG): Natural gas that has been cooled to a very low temperature and converted into liquid form for easier storage and transportation. The Nigeria LNG Limited (NLNG) is the pioneer player here. It operates six liquefaction units (LNG trains) producing 22 million tonnes per year of LNG, this amounts to roughly 10% of the world's LNG consumption, Solid company! Well run by the best of the best. Let me not digress and get carried away by the huge potential impact of the company --I will get back to this subsequently.

3. Compressed Natural Gas (CNG): Natural gas that is compressed to a high pressure and stored in containers for use as a vehicle fuel or in some industrial applications. Generally wide spread in terms of use, a significant number of companies have adopted CNG as fuel for power generation, comes with an estimated cost savings of 25-30 percent when compared to diesel fired generating sets, off course cleaner energy and lower operations and maintenance. A fairly notable number of companies are operating in this space and are expanding very rapidly. The Federal Government under the leadership of President Bola Tinubu have expressed interest in developing this space as a cushion to the removal of the subsidy on PMS. We believe this is a noteworthy project; can be delivered in time with the appropriate team in place and more importantly political will and right private sector partnerships.

4. Natural Gas Liquids (NGLs): These include propane, ethane, butane, and pentane, which are separated from the natural gas stream and used for various purposes such as heating, cooking, and petrochemical feedstocks. One simple form for explanation purpose is Liquified Petroleum Gas – LPG (or cooking gas) contains 70% Butane and 30% Propane, with a flash point. Widely used around the country.

5. Gas-to-Liquids (GTL) Products: These are derived from natural gas through chemical processes, producing products like synthetic fuels, waxes, and specialty chemicals. This is where refining capacities come to play with its significant impact. We have been told the Port Harcourt Refinery will be streamed sometime in 2024 and we all wait earnestly for the Dangote Refinery, they can produce these.

6. Dimethyl Ether (DME): A clean-burning alternative fuel produced from natural gas, often used as a substitute for diesel. This is not widely used in Nigeria, but the refining process for DME can be

           produced through another form of liquefaction.

7. Ammonia: Produced from natural gas through the Haber-Bosch process, ammonia is used primarily in the production of fertilizers. Huge potential here, another refinery extract that has tremendous value both locally and abroad.

8. Methanol: Also produced from natural gas, methanol has a wide range of applications, including as a chemical feedstock and fuel.

Getting to Work

President Tinubu as substantive Minister of Petroleum Resources sets up a hands-on committee comprising of expert folks that will drive the process reporting directly to him with very clear mandates;

tasks and deliverables under his Excellency’s capacity. Invites the leadership of the Nigeria LNG Limited (NLNG) and other leading production companies--seek to collaborate to develop LNG/CNG service

stations across different parts of Nigeria.

LNG is the most cost efficient energy source in comparison to AGO, and CNG. See below;

A couple of assumptions here on engine size, forex and CAPEX.

LNG can be deployed around the country in retail outlets, trucks, buses, private vehicles drive in and refuel. It is clean, efficient and provides significant cost savings. It can be done!!

Considerations here;

LNG is typically sold through long-term contracts or spot markets. Long-term contracts involve agreements between suppliers and buyers for a fixed quantity of LNG over a specified period, often

several years. Spot markets, on the other hand, involve the sale of LNG on a short-term basis, usually for immediate or near-future delivery. The pricing of LNG can be linked to various factors such as oil prices or natural gas market indices. The process involves negotiation between sellers and buyers to determine terms, pricing, and delivery schedules. This is where the commercial discussions require concessions and the collaboration of FGN and the LLNG to partner on willing buyer willing seller basis. It can be done!

Others

1. Liquefaction: Natural gas is primarily methane. To convert it into LNG, it needs to be cooled to extremely low temperatures, typically around -162 degrees Celsius. This cooling process causes the gas to change from a gaseous state to a liquid state, which allows for more efficient storage and transportation.

2. Transportation: The LNG is transported in specialized cryogenic tanker trucks or ships designed to keep the LNG at its very low temperature. This minimizes any vaporization or loss during transportation.

3. Storage: Upon arrival at the service station, the LNG is transferred to storage tanks. These tanks are heavily insulated to maintain the low temperature and prevent the LNG from warming up and converting back into a gas.

4. Vaporization: When the vehicle is ready to be fueled with LNG, a process called vaporization takes place. This involves using a vaporizer to heat the LNG and convert it back into its gaseous state, making it suitable for use as a vehicle fuel.

5. Dispensing: The vaporized LNG is then fed through dispensers, similar to the traditional PMS or diesel pumps, into the fuel tank. Vehicles that run on natural gas (CNG or LNG) have specially designed tanks to store the gas safely.

6. Filling Process: Filling an LNG-powered vehicle is similar to filling a PMS or diesel vehicle, but it might take a bit longer due to the lower energy density of natural gas. The fueling process is designed to be safe and efficient.

Important to note that operating an LNG service station requires specialized equipment for the liquefaction, storage, and vaporization of the natural gas. These facilities need to adhere to strict safety

and environmental regulations to ensure the safe handling of LNG.

The process outlined above evidences how LNG is processed and distributed for sale at service stations. I admit it appears complex but it is a well-established process that enables the use of LNG as a cleaner and more cost effective alternative fuel for vehicles. LNG is considered a cleaner alternative to traditional fossil fuels Compressed Natural Gas (CNG) - this is largely in existence and the FGN is already making assertions towards this aspiration. However work needs to be done to achieve the end value. The process for CNG retailing is quite similar to LNG, however the infrastructure, hence CAPEX may vary. The discussions around the securitization of the molecules through concessions has to be agreed upon with the steer of the President and the committee members. I note here for emphasis; nothing can be achieved without a strong sense of patriotism and the will power to get things done. It can be done. Less I forget; what are the socioeconomic benefit of this for our dear country and citizens in the short medium and long terms;1. Reduced cost of energy – with PMS at an average cost of N600 per ltr depending on the location in the country, this initiative will begin with massive transportation of our people, farm produce and other goods using this God given natural resource well harnessed to power vehicles.

2. Job creation – can we begin to imagine the number of jobs this entire value chain will generate both directly and indirectly. Drivers, dealers, attendants, welders, to mention a few

3. Foreign exchange savings and earnings – so we have the natural gas; yes we need to deploy resources in the short term to build the required infrastructure, but ultimately when this is done we benefit from recurrent import of finished products, natural gas is priced in USD, but all the other requirements are done locally and will be evidenced in pump price. The earning from this will support LNG T7

4. Reduction in food inflation—ever since the removal of subsidy we have had galloping inflation numbers, NBS reports 24.08% inflation in July 2023 up from 22.79% in June. Imagine a hub that allows us transport food in large volumes using LNG/CNG powered trucks. I know we still need to work on security matters in the hinterland, but reduced energy will drive down costs.

5. Clean energy – no diesel polluting our air resulting in sickness and deaths
6. Foreign Investment – so we create the framework that allows foreign investors to see the opportunity and potential here. We can partner with them for the acquisition of the busses on a Build Own Operate (BOO) or even BOOT model.

Folks it can be DONE!!

I conclude this with this inventive: “our collective innovations, ideas, interventions and offerings determines the pace and outcome of our growth, we will succeed as long as we engage productivity,

integrity, zeal and most importantly patriotism”

Dapo Adeyoyin is the CEO of Dapik Energy an Energy development, consulting and advisory firm out of Lagos. Nigeria.